Reuters: Regulatory News: UPDATE 1-Trina Solar forecasts higher shipments, margins still anemic

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UPDATE 1-Trina Solar forecasts higher shipments, margins still anemic Feb 26th 2013, 13:44 Tue Feb 26, 2013 8:44am EST * Reports sixth straight quarterly loss * Expects panel shipments, system deliveries to rise 32 pct * Expects first-quarter gross margin to be "low single digit" Feb 26 (Reuters) - Chinese solar panel maker Trina Solar Ltd forecast higher shipments for the year as it looks to sell more at home and in emerging solar markets such as Japan, but at least one analyst said prices would stay too low to make a profit. Trina Solar reported its sixth straight quarterly loss with no end in sight to the slump in panel prices. The company's fourth-quarter margins fell short of its expectations even as its shipments outpaced estimates due to higher sales to China-based customers. "This is what we call profitless prosperity at work," said Raymond James analyst Alex Morris. "Another quarter of decent top line outlook, but prices are simply too low for profitability and are unlikely to meaningfully improve anytime in the foreseeable future." Trina was encouraged by the Japanese and Chinese governments' plans to raise targets for solar power, Chief Executive Jifan Gao said. China, the world's top energy consumer, will more than double its installed solar power capacity this year from 2012, the government said in January. The country plans to add 10 gigawatts (GW) of installed solar power capacity this year, putting it within reach of its target of 21 GW by 2015. Japan introduced a feed-in tariff scheme last July to help spread the use of solar and other types of clean energy in the wake of the March 2011 Fukushima nuclear disaster. Trina said on Tuesday it expected panel shipments and system deliveries to increase up to 32 percent to a range of 2.0 GW to 2.1 GW in 2013. The company, whose shares were up less than 1 percent in premarket trading, forecast shipments of 420 megawatt (MW) to 430 MW in the first quarter, compared with 415 MW in the fourth quarter. Trina, however, expects its first-quarter overall gross margin to be a "low single digit" in percentage terms. The fourth-quarter gross margin was 1.9 percent. Higher demand is unlikely to result in margin expansion. Companies are looking to get rid of inventory at cheap prices. Any rise in solar prices would in itself hurt demand, spurred by cheaper products, Maxim Group analyst Aaron Chew said on Monday. Trina's net loss widened to $87.2 million, or $1.23 per American depositary share (ADS), in the fourth quarter from $65.8 million, or 93 cents per ADS, a year earlier. Revenue fell nearly 31 percent to $302.7 million. Trina Solar shares closed at $4.47 on the New York Stock Exchange on Monday. The stock has gained about 82 percent in the last three months as investors bet that lower prices would spur demand in China and other emerging solar markets. Link this Share this Digg this Email Reprints

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