Although a slight improvement on Q3 2010, which saw 290.5 megawatts (MW) of solar modules shipped, at 370.1 MW, Trinas solar module shipments took a sequential tumble in Q3 2011, from 396.4 MW in Q2. The company cited a reduction in available project financing for some customers’ European projects as a main reason for the downturn.
In terms of the companys manufacturing capacity, its annualized in-house ingot and wafer production capacity is currently around 1.2 gigawatts (GW), while its cell and module production capacity is roughly 1.9 GW. By the end of the first half of 2012, it expects to increase its cell and module capacity by around 500 megawatts, based on its new Honey technology.
In a company note issued by Jefferies, the analysts are skeptical that this can be achieved, however. They write, " we believe the company high efficiency ‘Honey’ selective emitter technology is not commercialized and faces operational ramp risk."
Net revenues, meanwhile, fell 16.8 percent from Q2 2011 and 5.2 percent from Q3 2010, to hit $481.9 million in Q3 2011.
Gross profit was significantly affected, having fallen from a healthy $159.4 million in Q3 2010, and $98.3 million in Q2 2011, to just $52.0 million in Q3 2011. Gross margin was also negatively affected, having dropped from 31.4 percent in Q3 2010, and 17 percent in Q2 2011, to reach just 10.8 percent in Q3 2011.
Broken down, gross margin relating to Trinas in-house wafer production to module production was 18.3 percent in Q3 2011, compared to 20.4 percent in Q2 2011, and 37.6 percent in Q3 2010. "The sequential reduction was primarily due to the decline in average module selling price exceeded the company’s decline in manufacturing costs," explained Trina in a statement released.
It added, "The company made a non-cash inventory write down in the third quarter of $19.1 million based on the revaluation of its inventory as a result of notable market price declines of raw materials, work-in-progress and finished goods in the quarter."
Q3 2011 operating expenses, on the other hand, rose to $75.5 million, up 15.3 percent on Q2 2011 and 62.6 percent year-on-year. This resulted in a significant Q3 2011 operating loss of $23.5 million, down from the $32.8 million profit seen in Q2 2011, and the $113 million achieved in Q3 2010.
Furthermore, a net loss of $31.5 million was experienced, down from a net income of $11.8 million in Q2 2011, and $82.9 million in Q3 2010.
Based on its newly released results, Trina expects to ship between 320 and 350 MW of solar modules in Q4 2011. It adds that its overall Q4 gross margin should be around 10 percent. Consequently, for the full year 2011, the company has revised its shipment guidance downwards, from between 1.75 and 1.8 gigawatts (GW) to 1.4 GW which, if achieved, will represent growth of 32.5 percent on 2010.