Monday, August 18, 2008

Piper Jaffray Positive on Solar Sector in '09 Following Trina Solar (TSL) Q2 Earnings Commentary

The only green on the solar screen is SOLF which is reporting next week.
From StreetInsider:

Piper Jaffrey's Jesse Pichel issued a research report this morning evaluating Trina Solar's (NYSE: TSL) Q2 earnings results, which were released this morning before the market opened.

The firm notes that Trina reported better-than-the-Street sales of $204 million given strong shipments of 47.6MW and an average selling price of about $4.29/watt. At the same time, Trina reported Q2 gross margins of 23.2% (down 60 basis points sequentially) that were slightly lower-than-expected on "higher average polysilicon costs..." Trina's EPS for the quarter were also slightly below consensus estimates given a foreign exchange loss of about $0.24 and an $0.08 impact from Lianyungang project discontinuance.

Notably, Trina "indicated it has secured ~95% of its '08 polysilicon needs and that it has entered into longer-term supply contracts with several Chinese suppliers for ~3.7GW of polysilicon, which should help lower its polysilicon costs over the next few years." For '09, Trina has "also indicated it has signed customer contracts for ~60% of its expected '09 output with ~20% contracts at fixed pricing with just 3–5% ASP decline."...More

TSL is down $1.29 (4.16%)