Trina Solar Ltd. announced its financial results for the fourth quarter and fiscal year 2008. The company also announced the planned establishment of the company’s North American operations base in San Francisco in 2009.
Trina Solar’s net revenues in the fourth quarter of 2008 were $216.3 million, which exceeded the company’s previous guidance of $190 million to $210 million, a decrease of 25.6% sequentially and an increase of 113.4% year-over-year. Total shipments were 57.59 MW, within the company’s previous guidance of 55 to 60 MW, compared to 66.36 MW in the third quarter of 2008 and 23.91 MW in the fourth quarter of 2007. The sequential decline in ASP and total shipments was primarily due to weakened economic conditions, decreased availability of project financing in European markets, and reduced Spanish market demand resulting from amendments in government incentive legislation.
Gross profit in the fourth quarter of 2008 was $20.8 million, compared to $65.2 million in the third quarter of 2008 and $27.6 million in the fourth quarter of 2007. Gross profit includes a non-cash inventory provision of $17.0 million. Gross margin was 9.6% in the fourth quarter of 2008, compared to the company’s previous guidance of 13% and 15%. The fourth quarter gross margin decreased from 22.4% in the third quarter of 2008 and 27.2% in the fourth quarter of 2007.
Operating expenses in the fourth quarter of 2008 were $16.9 million, a decrease of 8.0% sequentially and an increase of 49.0% year-over-year. The company’s operating expenses accounted for 7.8% of its fourth quarter net revenues, an increase from 6.3% in the third quarter of 2008 and a decrease from 11.2% in the fourth quarter of 2007. The sequential percentage increase was primarily due to the sequential decline in total net revenues. The year-over-year decrease was achieved due to expense-control measures taken by the company during 2008 combined with the continued growth of the company’s business over the course of the year. Operating expenses in the fourth quarter of 2008 included approximately $1.0 million in share-based compensation expenses, compared to approximately $0.7 million in the fourth quarter of 2007.
As a result of foregoing, operating income in the fourth quarter of 2008 was $3.9 million, compared to $46.8 million in the third quarter of 2008 and $16.2 million in the fourth quarter of 2007. Operating margin was 1.8% in the fourth quarter of 2008, compared to 16.1% in the third quarter of 2008 and 16.0% in the fourth quarter of 2007.
For 2008, net revenues were $831.9 million, compared to the company’s previous guidance of $800 million to $850 million. Total net revenue rose 175.6% from $301.8 million in 2007, primarily due to the increased shipments and offset in part by the decreased ASP. Total shipments were 201.01 MW, an increase of 164.8% from 75.91 MW in 2007. Gross profit for 2008 was $164.4 million, an increase of 143.2% from $67.6 million in 2007. Gross margin was 19.8% in 2008, compared to 22.4% in 2007. The company’s previous 2008 guidance was from 20% to 22%.
Operating income for 2008 was $100.0 million, up 177.8% from $36.0 million in 2007. Operating margin was 12.0% in 2008, compared to 11.9% in 2007. Net income from continuing operations for 2008 was $61.4 million, an increase of 73.5% from 2007. Net income was $61.4 million, an increase of 71.7% from 2007. Net margin was 7.4% in 2008, compared to 11.8% in 2007. Earnings per fully-diluted ADS for 2008 were $2.37, an increase of 57% compared to $1.51 per fully diluted ADS for the full year 2007.
