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%)