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NEW YORK, Feb 17 (Reuters) - Trina Solar Ltd TSL.N said on Tuesday fourth-quarter revenue would beat its forecasts but warned that margins would suffer due to a charge to write down the value of its silicon inventory.
Changzhou, China-based Trina said in a statement it would take a charge of $16 million to $18 million because of the steep decline in market prices for silicon, the material that turns sunlight into electricity in its photovoltaic modules.
That will trim gross margins in the fourth quarter to between 9 percent and 10 percent, compared with its forecast for 13 percent to 15 percent.
Net revenue for the quarter will top its forecast range of $190 million to $210 million, the company said, and it will cut its short-term debt by $41 million to $249 million.
The debt reduction was also due to the sharp drop in the price of silicon, which tumbled during the quarter as demand from solar companies weakened.
Makers of solar cells and modules have suffered in recent months as the global credit crisis has dried up funding for new projects and the weak euro has hurt profit margins for companies that sell into the European market.
Also on Tuesday, China-based Canadian Solar Inc CSIQ.O cut its 2009 shipment forecast and said fourth-quarter earnings would suffer from the slowdown.
Canadian Solar said it expects to ship 300 to 350 megawatts of solar cells in 2009, well below its earlier forecast for shipments of 500 to 550 MW.
It said net revenue would be $66 million to $71 million for the fourth quarter, but gross margin would fall into negative territory.
Shares of Trina slipped 2.5 percent to $8.33 in morning trade on the New York Stock Exchange, while Canadian Solar shares fell 6.4 percent to $4.68 on the Nasdaq . (Reporting by Matt Daily; Editing by Steve Orlofsky and John Wallace)
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