Trina Solar Settlement With Solyndra Prompts Shift to Loss

  • Sales to China helping boost panel deliveries to 1.7 gigawatts
  • Trina is the world's biggest supplier of solar panels

Trina Solar Ltd., the world’s biggest supplier of solar panels, reported its first loss since 2013 after settling a legal dispute with another solar manufacturer that went out of business four years ago.

Trina put aside funds in the third quarter to cover a $45 million settlement with Solyndra LLC, resolving a long-running conflict. That led to a net loss of $20 million for the quarter, the Changzhou, China-based company said in a statement Monday. Analysts were expecting earnings of $31.9 million, the average of six estimates compiled by Bloomberg.

The company agreed to the settlement on Nov. 17 “to avoid a burdensome and protracted litigation,” Chief Executive Officer Jifan Gao said in the statement. Solyndra sued Trina and other Chinese photovoltaic manufacturers in 2012 alleging antitrust claims.

Solyndra shut down operations and fired most of its 1,100 workers in August 2011. It had received a $535 million loan guarantee from the U.S. Energy Department before filing for bankruptcy, and its failure made the company a talking point for Republican politicians to criticize President Barack Obama’s efforts to subsidize renewable energy.

Trina reported its first loss since the second quarter of 2013, 24 cents an American depositary receipt, compared with profit of $11.5 million, or 14 cents, a year earlier. Excluding the Solyndra provision and other items, the company reported income of $18.3 million, or 21 cents an ADR, falling short of the the 28-cent average of nine analysts’ estimates compiled by Bloomberg.

Panel Shipments

Trina shipped 1.7 gigawatts of panels in the quarter as global demand for clean energy climbs. That was driven in part by record deliveries to China, the world’s biggest solar market. Sales swelled 29 percent to $793 million million a year earlier.

For its own portfolio of solar projects, Trina expects to shift from a build-and-hold strategy to a “mix of build-and-hold and build-and-sell,” Teresa Tan, chief financial officer, said Monday on a conference call. Trina is also considering forming a public holding company, known in the industry as a yieldco, to own some of its developed assets. Tan said the U.S., Hong Kong and China would be considered for the potential yieldco.

Trina raised its guidance for 2015 shipments to between 5.5 gigawatts and 5.6 gigawatts from between 4.9 gigawatts and 5.1 gigawatts. The company expects to ship as much as 1.65 gigawatts in the fourth quarter.

“Installations in China have been showing quite a bit of strength,” Pavel Molchanov, a Houston-based analyst at Raymond James Financial Inc., said in an interview Friday, before Trina reported its results.

(An earlier version of this story corrected the adjusted income number.)

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