Trina Solar Ltd. (TSL)
Q3 2010 Earnings Call
November 30, 2010 8:00 AM ET
Tom Young – Senior Director, IR
Jifan Gao – Chairman and CEO
Terry Wang – Chief Financial Officer
Gary Yu – Senior Vice President, Operations
Ben Hill – Vice President, Sales and Marketing
Rob Stone – Cowen and Company
Kelly Dougherty – Macquarie
Jesse Pichel – Jefferies
Vishal Shah – Barclays Capital
Timothy Arcuri – Citi
Sanjay Shrestha – Lazard Capital
Ahmar Zaman – Piper Jaffray
Nitin Kumar – Nomura Singapore
Adam Krop – Ardour Capital
Paul Clegg – Mizuho
Mark Bachman – Auriga
Previous Statements by TSL
» Trina Solar CEO Discusses Q2 2010 Results - Earnings Call Transcript
» Trina Solar Ltd. Q1 2010 Earnings Call Transcript
» Trina Solar Ltd. Q4 2009 Earnings Call Transcript
Good morning. My name is [Brooke], and I will be your conference operator today. At this time, I would like to welcome everyone to the Trina Solar Third Quarter 2010 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions)
Thank you. I would now turn the conference over to Mr. Tom Young, Senior Director of Investor Relations. Thank you, Mr. Young. You may begin your conference.
Thank you, Operator. Good day to all and welcome to Trina Solar’s third quarter 2010 earnings conference call. This is Thomas Young, Trina Solar’s Senior Director of IR. With us today are Trina Solar’s Chairman and CEO, Jifan Gao; Chief Financial Officer, Terry Wang; Senior Vice President, Operations, Gary Yu; and Vice President, Sales and Marketing, Ben Hill.
Before I turn the call over to Mr. Gao, may I remind our listeners that in this call, management’s prepared remarks contain forward-looking statements which are subject to risk and uncertainties. And management may make additional forward-looking statements in response to your questions.
Therefore, the company claims the protection of the Safe Harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today, and therefore, we refer you to a more detailed discussion of the risks and uncertainties in the company’s filings with the Securities and Exchange Commission.
In addition, any projections as to the company’s future performance represent management’s estimates as of today, November 30, 2010. Trina Solar assumes no obligation to update these projections in the future as market conditions change.
For those of you unable to listen to the entire call at this time, a recording will be available via webcast for 90 days at the Investor Center of Trina Solar’s website at www.trinasolar.com.
With that, it’s my pleasure to turn the call over to Trina Solar’s Chairman and CEO, Mr. Jifan Gao.
Thank you, Thomas. And thank you everyone for joining us today. We are pleased to announce that the third quarter was another quarter of spectacular conclusion for Trina Solar. We exceeded our guidance with shipment of volume of 291 megawatt, a 30% jump, resulting in surpassing a milestone of $500 million revenues. We exceeded our gross margin guidance due to ongoing strong demand and the continued efficient execution.
We have furthered our goal to build a globally recognized and trusted brand through raising the performance and reliability of our products to an expanding customer base. We continue to witness promising growth in our businesses not only across Europe but in North America, Australia, Japan, India, China and other emerging solar markets.
With excellent creditability across most of our geographies, it has the cost conscious and with first three integrated manufacturer platform. We are better positioned crystalline player going into 2011. We believe our diversified sales approach will allow, allocate our products to higher growth market in Europe, North America and Asia.
The third quarter saw new progress on the (inaudible) plant. We announced the signing of a Letter of Agreement with MIT to become a member of its Industrial Liaison Program. This will provide Trina Solar the possibility to directly access the search opportunities with MIT researchers.
Finally, we are pleased to announce that Trina Solar’s ADR is one of the 19 companies selected to be quoted on Singapore Exchange GlobalQuote Board in October. Our ADR quotation on the board has significant value by increasing access to our ADR (inaudible) investors during local trading hours.
Looking forward, as a global power leader with focuses that -- focus the business model, establish the brand through strong sales and distribution network, (inaudible) and solid balance sheet, we have significant room to continue gain market share.
I would now like to turn the call over to our CFO, Terry Wang, who will share our third quarter 2010 financial results. Terry?
Thank you, Mr. Gao, and welcome everyone today. I would like to present an overview of our financial results, followed by the company’s guidance for the fourth quarter. The third quarter was another exceptional quarter, which we believe reflect our secular execution, growth and cost structure.
We achieved record shipment volumes and the gross margin, which exceeded our previous guidance of approximately 30%. Our total net revenue in the third quarter was $500 million -- $509 -- $508.3 million driven by sequential shipment volume increase of approximately 30%.
This has record shipment volume of 291 megawatts exceeded our guidance of 215 to 250 megawatts, reflecting increased brand recognition for products in the established and the new PV markets, including the U.S. and of the Australia market.
Net revenue in the third quarter included approximately $4.3 million of other sales. Our gross profit rose to $159.4 million, approximately 35% higher than the second quarter. Our overall gross margin was 31.4% in the third quarter of 2010 above the company’s guidance of approximately 30%.