UPDATE 1-Solarfun Q4 results beats Wall Street view; shares up

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March 27 (Reuters) - Solarfun Power Holdings Co Ltd (SOLF.O), which makes photovoltaic cells and modules that convert sunlight into electricity, reported fourth-quarter results above expectations on increased shipments and selling price, sending its shares up 11 percent.

However, the company warned that gross margins in the first quarter will be under pressure.

For the fourth quarter, the company reported net income of $9.1 million, or 19 cents a basic American depository share. The company did not provide comparable figures for the year-ago quarter in U.S. dollar terms.

The one analyst who covered the company's earnings had forecast a profit of 18 cents a share, before special items, according to Reuters Estimates.

Net revenue for the quarter was $135.4 million. Three analysts on average were expecting revenue of $115.3 million.

Photovoltaic module shipments for the quarter as reported totaled 28.1 megawatts (MW), compared with 27.3 MW in the third quarter.

Average selling price rose more than 5 percent sequentially to $3.85 per watt.

The company said it was affected by winter in China in February and continues to be affected by the relatively tight supply and increasing costs of polysilicon, a key raw material used in making solar cells.

Solarfun expects these factors to pressure gross margins for the first quarter of 2008.

It expects volumes in first quarter to be at least 35 MW, and average selling prices to remain strong and relatively constant.

Shares of the company rose 11 percent to $12.75 in trading before the bell. (Reporting by Hezron Selvi in Bangalore; Editing by Jarshad Kakkrakandy)