NEW YORK (AP) — Shares of solar companies dropped Tuesday as Trina Solar's fiscal fourth-quarter performance missed analysts' expectations and its profit margins shrank.
Solar companies have struggled in the past year amid tough economic conditions that have sent demand for their products down. At the same time heavy competition has forced them to cut prices. Meanwhile some producers of thin-film solar panels — including Solyndra, Beacon Power and Abound Solar — have filed for bankruptcy in part because they could not compete with cheaper producers from China.
Trina Solar Ltd. lost $1.23 per American depositary share for the three months ended Dec. 31. Analysts polled by FactSet expected a loss of 80 cents per share.
Gross profit margin fell to 1.9 percent from 7.1 percent a year ago, mostly because of a decline in the average selling price of solar modules.
Shahriar Pourreza with Citi Investment Research said in a client note that Trina's management is starting to position the company for a margin recovery, shifting resources into regions with a sustainable solar spending outlook going forward.
The analyst said that Trina has increased its exposure in the U.S., China, Australia and Japan, while reducing exposure in historical growth regions like Italy, Spain and Germany. Those countries have reduced or eliminated subsidies for solar power as the eurozone struggles with recession and huge debt burdens.
Pourreza kept a "Neutral" rating and $6 price target on Trina. In afternoon trading Trina Solar shares fell 34 cents, or 7.7 percent, to $4.13.
Other solar companies languished as well. JA Solar Holdings Co. fell 22 cents, or 4.6 percent, to $4.52. Suntech Power Holdings Co. was flat at $1.44. First Solar Inc. fell $1.05, or 3.2 percent, to $31.69. SunPower Corp. dropped by 47 cents, or 4 percent, to $11.44. LDK Solar Co. lost 3 cents to $1.75 and JinkoSolar Holding Co. fell 29 cents, or 3.4 percent, to $8.33.