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UPDATE 2-Trina Solar cuts margins, shipments estimates; shares down
November 12, 2012 / 2:10 PM / 5 years ago

UPDATE 2-Trina Solar cuts margins, shipments estimates; shares down

(Adds comments from spokesman analyst)

Nov 12 (Reuters) - Chinese solar panel maker Trina Solar Ltd slashed its estimates for third-quarter shipments and gross margins on weak prices, days after the United States approved duties on billions of dollars of solar equipment imports from China.

Trina shares, which have nearly halved in value this year, were down nearly 4 percent in early trading on the New York Stock Exchange on Monday.

The anti-dumping duties follow allegations by U.S. companies that Chinese firms have been selling solar cells and panels at unfairly low prices and receiving government subsidies.

The industry has also been hit by a glut of panels that has sent prices crashing, squeezing margins and forcing some European and U.S. companies into bankruptcy.

“Our third-quarter sales were adversely impacted by a continued supply-demand imbalance in the global PV industry, high inventory levels and irrational pricing practices by some competitors in the market,” Chief Executive Jifan Gao said in a statement.

Trina said on Monday that it now expects gross margin between break-even and 1.5 percent for the quarter ended Sept. 30, lower than its prior outlook of mid-single digits.

The estimate includes the impact of a provision for writing down inventory and a reversal of prior provisions for anti-dumping and countervailing duties in the United States, Trina Solar said.

The company took a $26.2 million provisions for anti-dumping and countervailing duties in the first quarter.

The provisions were taken largely to cover potential duties for retroactive payments, and were reversed after the U.S. International Trade Commission’s (ITC) ruling last week, Vice President of investor relations Thomas Young said in an e-mail.

The ITC last Wednesday reversed a Commerce Department ruling which had called for the tariffs to be applied retroactively by 90 days.

Trina, however, now faces duties of about 23.75 percent, while Suntech Power Holdings - the world’s largest producer of solar panels - has been slapped with duties of about 36 percent.

“The final number for Trina is quite a bit below initial verdicts, so I‘m not sure that the earlier provisions would be raised meaningfully,” said Raymond James analyst Alex Morris.

Trina said it expects solar module shipments in the third quarter to be between 375 megawatts (MW) and 385 MW, below its previous forecast of 450 MW to 480 MW. (Reporting by Swetha Gopinath in Bangalore; Editing by Saumyadeb Chakrabarty and Joyjeet Das)

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