Trina Solar Conference Call Highlights

Trina Solar Limited TSL reported its third quarter earnings on Monday.

Below are some key highlights from the company's conference call:

Financial Metrics:

• We shipped total 1,063 megawatts including 936 megawatts of external shipments and 127 megawatts of internal shipments to the company's own downstream projects compared to a total shipment of 943 megawatts in the second quarter of 2014 and 775 megawatts in Q3 of 2013.

• Based on the external shipments, net revenues in Q3 was $616.8 million, an increase of 18.8 percent sequentially and an increase up 12.5 percent year-over-year.

• The sequential increases in revenue and shipments were primarily due to an increase in demand from Japan, China and other Asian markets.

• The year-over-year increases in revenues and shipments were driven largely by rising shipments - rising shipment volumes due to growing demand from key geographical regions, particularly Japan and the Europe and due to greater demand from Asia Pacific region.

• Gross margin was 16.7 percent in the third quarter of 2014 compared to 15.4 percent in the second quarter of 2014 and 15.2 percent in the third quarter of 2013.

• The sequential increase in gross margin was the result of several factors including sales mix change with higher shipments to Japan.

• Lower shipments to U.S. and reduced in-house manufacturing costs as a result of greater economic of scale and improvements in operation efficiency.

Guidance:

• In the Q4 of 2014, the company expect to ship between 1.045 megawatts - gigawatts at 1.095 gigawatt of PV module of which 40 to 60 megawatts will be shipped to a downstream PV project.

• The company expects its blended gross margin for the fourth quarter of 2014 to be in the range of 14.5 percent to 15.5 percent.

• For 2014 guidance of total PV module shipment, we expect the shipment to between 3.61 gigawatt and 3.6 gigawatt, of which 340 megawatt to 360 megawatt of PV modules to be shipped to the company's own downstream project.

• The company expects to complete 360 megawatt of downstream solar project by the end of 2014 as compared to the original guidance of completing 400 to 500 megawatts projects by end of 2014.

• Trina Solar have closed key geographies. Internal module shipments were 1,063.8 megawatts including 936.8 megawatts external and 120 megawatts internally to the company downstream power projects compared to 943.3 megawatts external in quarter two.

• This market have phased consecutive quarter of growth. Despite a weaker ASP of $0.62, we achieved a high gross margin and that you see in-house manufacturing cost.

• The sequential increase in gross margin was the result of the several actions including increase in shipment to Japan and decrease in shipment for U.S. resulting in low AD and CVD duty that mitigated that impact on overall cost.

• Our greater economies of scale and improvements in operation efficiency also contributes to reduce our in-house manufacturing products.

This change is mainly due to the cancelation of 130 megawatts solar plant project development in Inner Mongolia after the company conducted a thorough analysis on the project's return.

Also, the Chinese government changing policy with respect to the acquisition of solar projects will impact the development of the company's pipeline to a certain extent.

Trina Solar will continue to be flexible in developing projects.

It's prepared to respond to the government policy changes and believes the change will ultimately benefit the sustainable and strong growth momentum in China.