China-based Trina Solar Ltd. reported contrasting operations results this second quarter, posting a slight increase in its net revenue while at the same time garnering a markedly significant drop in its net income.
Trina Solar earned $579.5 million in net revenue for the second quarter of 2011, representing a 5.2 percent increase compared with last year's $550.9 million, and attributed to a rise in solar module shipments at 396 megawatts from Q1's 320 MW.
Solar module shipments for the second quarter of 2011 rose by 23.7 percent sequentially, representing a 77.9 percent year-on-year increase.
The increase of solar module shipments is in time with second quarter deals made by the photovoltaic modules manufacturer in the second quarter ending June 30, 2011.
The deals include a 35 megawatt sales agreement with Fotowatio Renewables Ventures Inc. subsidiary FRV AE Solar L.L.C. for a Texas project, and a supply deal with Germany-based Mohring Energie GmbH for 130 MW of module products.
In addition, Trina Solar's subsidiary Changzhou Trina Solar Energy Co. Ltd. , signed an extension of its national supply deal with Australian renewable energy distributor RF Industries Pty Ltd., with a 40-MW shipment slated within 2011.
The company also announced collaboration with Australia National University to develop high efficiency n-type monocrystalline solar cells with conversion efficiencies of 20 percent.
Apart from net revenue and sales shipment, all other second quarter figures for Trina Solar dropped.
Net income suffered the most impact, standing at $11.8 million from $47.7 million in the first quarter of 2011 and $38.7 million in the second quarter of 2010.
Earnings per fully diluted American Depositary Share was tallied at $0.17, compared to $0.63 in the same period of 2010, and $0.52 in the second quarter of last year.
"Despite this increase [in shipment volumes], our sales were affected by end-market financing and high industry inventory due in part to recently-issued regulatory revisions and reduction of solar subsidies in Italy," said Mr. Jifan Gao, chairman and chief executive of Trina Solar.
Gross profit was $98.3 million, representing a decrease of 35.0 percent sequentially and 17.3 percent for the year-over-year period. Gross margin stood at 17 percent, compared to 27.5 percent in the first quarter of 2011 and 32.1 percent in the second quarter of 2010.
Gross margin relating to the company's in-house wafer production to module production was at 20.4 percent.
Except for the solar module shipment increase, the 2011 second quarter period repeats last quarter's poor performance on almost all fronts. Net revenue and gross profit dropped by 14.2 and 25 percent respectively, while earnings per fully diluted American Depositary Share decreased at 0.63 percent.
Despite the losses, the company expects a better third quarter performance through upcoming photovoltaic module shipments ranging from 480 MW to 520 MW.