Weak demand and falling average selling prices in the solar industry has caused Trina Solar financial decline in module shipments, net revenues, gross margin and net income in the third quarter of 2016. Trina Solar said the decline was “largely as expected” in its financial report for the quarter.

Highlights

In 3Q16, Trina Solar’s total module shipments were 1,361.2MW, compared with 1,658.3MW in 2Q16 and 1,703.2MW in 3Q15. The net revenues were US$741.1 million, including US%60.6 million in revenues from the company’s downstream sectors such as operational solar projects, EPC services and other downstream business activities.

The total revenues declined 22.9% QoQ and 6.5% YoY. The sequential decreases in revenues and shipments were primarily attributable to an overall decline in average selling prices and a decrease of shipments in China following a rush of orders prior to June 30 in anticipation of a subsidy policy adjustment, stated Trina Solar.

Gross profit in 3Q16 was US$125.6 million, compared with US$176.3 million in 2Q16 and US$138.2 million in 3Q15. Gross margin also decreased sequentially from 18.3% to 16.9%, compared with 17.4% in 3Q15. The decreases were also attributed to falling average selling prices, which declined at a rate faster than the company’s reduction of costs.

During the quarter, operating income were US$54.9 million, down from US$83.7 million in the previous quarter but rapidly up from US$5.8 million in 3Q15. Net income was US$27.1 million, compared with US$40.3 million in 2Q16 and US$20 million in 3Q15; earning per ADS (diluted) was US$0.29, down sequentially from US$0.42 and up yearly from US$0.24.

“We had a slowdown in the third quarter as a result of an oversupply and increasing inventory levels of modules in the market, as well as weak demand in China following a strong first half of the year as developers rushed to place orders prior to a subsidy policy adjustment,” commented Jifan Gao, Chairman and CEO of Trina Solar. “As a result, our total shipments of 1.36 GW came in lower than the bottom end of our guidance. Despite the headwinds, we were pleased that we were able to maintain our leading position in the U.S. and achieve record shipments to Europe. Moreover, shipments to India grew substantially and accounted for nearly 30% of our total shipments.”

Achievements and new businesses

Although Trina Solar met a slowdown in 3Q16, its R&D team successfully set a world record of 19.86% aperture efficiency for our high-efficiency “Honey Plus” multicrystalline silicon modules.

In addition, Trina Solar had the annualized in-house manufacturing capacity of ingot, wafer, cell and modules of 2.3GW, 1.8GW, 5GW, and 6GW, respectively, as of the end of September, 2016.

Also by September 30, Trina Solar had 1,302.8MW of grid-connected and operational solar projects in China, U.S., and Europe. Trina Solar’s operational solar portfolio in China has reached 1,017.1MW by September, 2016, consisting of 1,267.6MW of utility-scale projects and 250.5MW of distributed generation systems.