Having cited weaker-than-expected financial results for the first quarter of 2011, due in part to the halt in PV installations in the key Italian market, Trina Solar has revised its second-quarter guidance, which points to the demand issues in Italy for the company's lower sales expectations.
Trina Solar said that module shipments in the second quarter are expected to be in the range of 395MW-397MW, compared to previous guidance of between 430MW-450MW. However, sales guidance was not provided.
PV module price declines are also having an impact on margins. Trina Solar said that gross margin guidance relating to its in-house wafer production and module production was expected to be approximately 20% for the second quarter.
Gross margin relating to the Trina’s in-house wafer production to module production was 32.2% in the first quarter of 2011, compared to the previous guidance of approximately 30%, and 36.5% in the earlier period, highlighting once again the impact and brunt of price declines impacting module producers after weak demand continued through the first half of 2011.
Trina Solar noted that overall gross margin is expected to be in the range of 17.0%-17.5%, compared to previous guidance margins being in the low 20s range.
“While shipment volumes in the second quarter were our highest ever, sales were adversely impacted by extended slower demand and high industry inventory due in part to recently issued regulatory revisions and reduction in solar subsidies in Italy,” commented Jifan Gao, chairman/CEO of Trina Solar. “We expect a significant improvement in production costs and an increase in shipment volumes in the third quarter.”
“As market demand conditions improve, we see a significant increase in pipeline from our distributors and large commercial and utility segment customers across Europe and North America. We are in discussions with new and existing customers to secure a growing number of sales agreements that cover the second half of the year.”
Trina Solar reiterated that full-year 2011 PV module shipments would still reach between 1.75GW-1.80GW, representing an increase of 65.6%-70.3% from 2010.