Trina Solar Ltd., the biggest supplier of solar panels, posted its biggest profit in four years as surging demand prompted the company to boost its shipment forecast by as much as 16 percent.
Net income attributable to Changzhou, China-based Trina was $40.9 million, or 42 cents an American depositary receipt, in the second quarter, up from $10.7 million, or 14 cents, a year earlier, according to a statement Tuesday. That was the most since 2011 and almost double the 25-cent average of eight analysts’ estimates compiled by Bloomberg.
Trina is benefiting from climbing demand for carbon-free energy, especially in China, India and the U.S., coupled with efforts to reduce its production costs and boost margins. The company became the world’s biggest solar company last year by shipping 3.66 gigawatts of panels, and said Tuesday it expects to deliver as much as 5.1 gigawatts this year, up from a May forecast of 4.4 gigawatts to 4.6 gigawatts.
“We achieved our strongest quarter ever in almost all financial and operating metrics,” as “demand in global solar markets continues to increase,” Jifan Gao, chairman and chief executive officer, said on a call with analysts.
The company will probably see added benefit this year from China’s move to devalue the yuan because many customers sign contracts priced in dollars, euros and other currencies. Trina reported a net foreign currency exchange gain of $5.1 million, compared to a loss of $1.7 million in the first quarter.
The company delivered 1.2 gigawatts of panels in the quarter, beating its May forecast of 1.1 gigawatts to 1.14 gigawatts and up from 795 megawatts a year earlier. Trina is expanding production and working to reduce costs, helping boost margins to 20 percent from 15.4 percent a year earlier. Revenue climbed 39 percent to $722.9 million.
Trina’s rapid expansion parallels the expected boom in demand for solar panels that’s expected to grow by almost a third this year.
“Continued cost-reduction efforts and Trina’s ongoing effort to build strong presence in fast-growing markets,” are starting to pay off, Jeffrey Osborne, an analyst at Cowen & Co. in New York, said in a research note Tuesday.