* Suntech, Trina earnings top Wall St views
* Shipments rise; demand seen climbing
* Suntech, Trina shares up 8 percent
(Adds background, comments from analysts, updates share
movement)
By Matt Daily and Laura Isensee
NEW YORK/LOS ANGELES, Nov 19 (Reuters) - Chinese solar
power companies Suntech Power Holdings Co Ltd and Trina Solar
Ltd posted higher-than-expected earnings on Thursday and said
demand for the clean energy systems was rebounding after a
dismal year, sending their stocks up 8 percent.
The companies' capacity plans and rosier outlook for panel
prices in 2010 echoed brighter sentiment from European
renewable energy players, who are banking on 2010 as demand
looks up. ID:nLB216187
Prices for the photovoltaic cells and modules that turn
sunlight into electricity have plummeted by as much as 50
percent over the past 12 months because of a glut of production
and difficulty in obtaining financing for new projects.
That price drop has helped spark demand, Suntech Chief
Executive Officer Zhengrong Shi told a conference call,
particularly in countries where solar developers are rushing to
start projects before potential cuts to renewable energy
incentives at the beginning of 2010.
Both Suntech and Trina announced plans to grow their
production capacity. Suntech, which will open its first U.S.
manufacturing plant next year, expects global production to
reach 1.4 gigawatts by mid-2010, while Trina pledged to invest
more to ramp up its output.
"They're signaling to us there that they're seeing that
demand is exceeding supply at this point and they want to be
prepared for a strong year in 2010," said Adam Krop, an analyst
with Ardour Capital Investments.
Suntech raised its full-year forecast for shipments and
said it expects them to rise by at least 10 percent in the
fourth quarter from the third quarter. For 2010, shipments
should rise at least 75 percent over 2009 levels, it said.
"This is the quarter where we really felt like Suntech has
really emerged out of this consolidation that was triggered by
the financial crisis relatively strong, compared to many of its
peer companies," Suntech's Chief Strategy Officer Steven Chan
said in an interview. ID:nN19171717
The company, one of the world's largest solar
manufacturers, saw third-quarter earnings slump by 30 percent
to $29.8 million from a year earlier as revenue fell 20 percent
to $473.1 million.
Still, the profit of 16 cents per American Depository Share
topped the 8 cents that analysts had forecast, and Suntech
shares rose.
For a graph showing how some major solar companies shares
have performed versus the oil sector, please click on:
http://graphics.thomsonreuters.com/119/US_SOLOIL1109.gif
Suntech expects prices for its panels to fall 10 percent in
the fourth quarter but forecast they would stabilize or rise
slightly in the first quarter of 2010.
Chan said the industry has stabilized from a price point of
view and customers are starting to prefer Suntech over other
brands.
TRINA SHIPMENTS HIT RECORD
Trina said its shipments nearly doubled to a record 123
megawatts in the third quarter, although the steep declines in
prices cut its revenues by 14 percent.
Trina's results confirm that overall "demand in the solar
market was very robust from August to the end of the third
quarter and remains so today and into the first quarter," said
Daniel Ries, an analyst with Collins Stewart.
The company, which raised $142.5 million in a public stock
offering in August, increased the low end of its full-year
sales forecast to 380 MW from 350 MW while keeping the upper
end at 400 MW.
Increasing global demand also prompted the company to
increase its production capacity of cells and modules from 600
MW by end-2009 to between 850 MW and 950 MW by the end of
2010.
Trina's earnings rose to $40.1 million, or $1.29 per ADS,
easily topping the 76 cents per share that analysts had
forecast, according to Thomson Reuters I/B/E/S.
Gross margin was 28.5 percent in the third quarter, up from
27.4 percent in the second quarter and 22.4 percent a year
earlier.
Shares of Suntech were up 8.0 percent to $16.30 in
afternoon trading on the New York Stock Exchange, while Trina
climbed 8.3 percent to $46.28, adding to a climb of more than
60 percent since the start of September.
(Editing by Gerald E. McCormick and Tim Dobbyn)
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