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(Reuters) - Trina Solar Ltd TSL.N raised its forecast for panel shipments this year as the Chinese company sells more at home and in Japan, easing dependence on Europe where it faces restrictions on imports.
Trina Solar's shares rose as much as 10 percent in early trade, touching a 15-month high.
Rivals JinkoSolar Holding Co Ltd (JKS.N) and Canadian Solar (CSIQ.O) have also gained from the push into newer, high-margin markets. While JinkoSolar swung to a profit after seven quarters of loss, Canadian Solar has forecast a profit for its full year.
Trina Solar, which reported a narrower quarterly loss, said it aims to turn profitable in the fourth quarter, but could post a profit in the current quarter depending on manufacturing costs and selling prices for panels.
" At least (we are) looking for operating margin profitability (in the third quarter)," Chief Executive Jifan Gao said on a conference call with analysts.
The company posted a negative operating margin of 5.4 percent in the second quarter, a significant drop from 22.7 percent a year earlier and 15.4 percent in the first quarter.
Operating margins at Chinese solar companies narrowed sharply in the last two years as they raked up debt to expand capacity. Trina Solar, however, is better positioned than its Chinese rivals with a debt-to-equity ratio of 1.01 as of March 31, according to Thomson Reuters data.
Trina Solar now expects to ship between 2.3 gigawatts (GW) and 2.4 GW of panels this year, above its previous forecast of 2-2.
Japan's share is expected to more than triple from a year earlier, while China could account for about 27 percent of the shipments, the company said in a post-earnings presentation.
Trina Solar expects to ship between 650 megawatts (MW) and 680 MW in the current quarter. The company shipped 647 MW in the second quarter.
Gross margins in the current quarter will be in low double digits in percentage terms with the company buying wafers and cells from third parties to make solar panels, as demand exceeds its capacity to make these building blocks.
Gross margins rose to 11.6 percent in the second quarter from 8.4 percent a year earlier.
Trina's net loss narrowed to $33.7 million, or 47 cents per American Depositary Share (ADS), in the quarter ended June 30, from $92.1 million, or $1.30 per ADS, a year earlier.
Revenue rose 27 percent to $440.7 million as the company sold more in newer markets and it also benefited from higher sales to Europe ahead of the cap on imports from China.
Chinese solar companies increased sales to Europe before restrictions that would limit solar shipments to 7 GW per year kick in. Demand in the EU market was about 15 GW in 2012.
Trina Solar shares were up 5.7 percent at $7.16 on the New York Stock Exchange on Tuesday. The stock has risen about 56 percent so far this year to its Monday close.
Reporting by Garima Goel in Bangalore; Additional reporting by Patturaja Murugaboopathy; Editing by Sriraj Kalluvila