UPDATE 2-Trina Solar posts adj Q1 profit, shares rise

* Posts surprise Q1 adj profit; revenue falls 39 pct

* Gross margin improves on lower raw-material cost

* Sees shipping 60 MW to 65 MW of modules in Q2

* Backs 2009 shipment view

* Shares up 9 percent (Recasts; adds details, analyst comment, background; updates share price)

By Adveith Nair

BANGALORE, May 28 (Reuters) - Chinese solar-products maker Trina Solar Ltd (TSL.N) posted a surprise quarterly profit before items, as gross margins increased helped by a fall in raw-material costs, sending its shares up as much as 9 percent.

Gross margin for the first quarter was 17.2 percent, exceeding Trina's previous outlook of 15 percent to 17 percent, helped by lower average silicon-purchase prices.

The company had reported margins of 9.6 percent in the fourth quarter of 2008.

"The real driver behind the results was better-than-expected gross margin," Ardour Capital analyst Adam Krop told Reuters.

Krop said he was comfortable with the company's second-quarter gross-margin outlook of 18 percent to 20 percent.

Trina gets 40 percent of its polysilicon from the spot market and has long-term contracts with "reliable" companies like South Korea's DC Chemical Co Ltd (010060.KS) and Germany's Wacker Chemie AG (WCHG.DE) for the remaining 60 percent, Krop said.

Polysilicon is a key raw material for the company, which makes photovoltaic solar products that turn sunlight into electricity.

"Not only are they benefiting from lower polysilicon spot prices ($70 per kilogram), they can also go back to their suppliers and renegotiate their contracts," Krop said.

SELLING PRICES FALL

While rising margins brought some cheer to investors, falling average selling prices (ASP) continued to be a dampener for the company, as is the case with other solar-products makers.