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Did Trina Solar Meet Analysts’ 2Q16 Earnings Estimates?

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Did Trina Solar Meet Analysts’ 2Q16 Earnings Estimates? PART 1 OF 8

How Did Trina Solar’s Stock React to Its 2Q16 Earnings?

Earnings announcement

Trina Solar (TSL) announced its 2Q16 earnings before market hours on August 23, 2016. In this series, we’ll analyze the company’s 2Q16 results in detail, compare the results with analysts’ expectations, and analyze any factors that caused deviation. Also, we’ll look at Trina Solar’s annualized manufacturing capacity at the end of 2Q16, its guidance for fiscal 2016, and analysts’ expectations after 2Q16 earnings. We’ll conclude the series with a discussion of the company’s current valuation in comparison to its peers’ valuations.

How Did Trina Solar’s Stock React to Its 2Q16 Earnings?

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Trina Solar’s stock reaction

Trina Solar posted strong earnings for 2Q16, reporting EPS (earning per share) of $0.42, compared to analysts’ consensus EPS estimate of $0.34.

However, future oversupply concerns of solar modules in global markets and an anticipated decrease in gross margin due to the expected decrease in ASP (average selling price) led to a relatively flat closing for Trina Solar’s stock on the day of its earnings release. On August 23, TSL closed at $10.54.

Peers’ performances

On the day of Trina Solar’s 2Q16 earnings release, its peers First Solar (FSLR) and Canadian Solar (CSIQ) closed nearly flat during the intraday trading session, whereas Yingli Solar (YGE) fell by nearly 5%. However, SunPower (SPWR) and SunEdison (SUNEQ) rose by nearly 2% and nearly 5%, respectively, during the same period.

The Guggenheim Solar ETF (TAN) tracks the broad-based solar market. It closed nearly unchanged on August 23, whereas the SPDR S&P 500 ETF (SPY) closed nearly flat during the same period.

In the next part of this series, we’ll look at Trina Solar’s shipments in 2Q16.

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