Trina Solar Updates Guidance (Part 2)
After the results note: We at ane time - post the outcome - know the difference. They took a accuse - exclusively thinly disclosed - on receivables Someone did non pay them!
Note: the post script is an of import business office of this story. My master weblog post was also hasty inward making an supposition well-nigh third-party module sales.
The Trina Solar press liberate updating guidance has me utterly perplexed (and I follow this stock closely).
Here is the telephone commutation text:
So yesteryear elementary subtraction nosotros guess that viii pct points of margin represents $19 million. This suggests that the full revenue is = $19 1000000 /.08 = $237.5 million.
But that is the revenue from 374 MW - thence revenue per watt = $237.5 million/ 374 1000000 watts = $0.635 per watt.
The lowest solar panel toll mentioned inward whatsoever analyst study I accept seen is $1.08 per watt.
Under 64 cents per watt is either a catastrophe inconsistent amongst whatsoever observable solar panel toll or at that topographic point is a meaning accuse the society is non disclosing.
Which is it?
John
Post script. Some people accept observed the typical three percent departure betwixt IN HOUSE wafer production together with END GROSS MARGIN - the departure existence 3rd political party panels they purchase inward together with and thence distribute.
They together with thence calculate 5.5 percent margin departure - implying ASP inward the 90s. Plausible - but however a disaster.
I had discounted this. Reason: I did non intend at that topographic point would hold out many third-party production sales when they are storing their ain materials inward warehouse together with can't sell it together with are cutting production. That was a guess only. Their ain production cutting is thence severe that third-party sales through their channel merely await unlikely.
But maybe at that topographic point genuinely are large 3rd political party sales remaining. There mightiness hold out a few reasons - but I am opened upwards to suggestion. Here goes for some thoughts:
(a). They are contractually obliged to sell for 3rd parties together with they accept contractual expenses larger than they are telling us, or
(b). They however sell for 3rd parties because the 3rd parties tin give notice deliver cheaper than their marginal manufacturing cost, or
(c). The 3rd political party materials is higher quality, or
(d). The collapse inward book was thence full that at that topographic point were 3rd political party sales inward the get-go of the quarter but non inward the terminate - thence 3rd political party sales were a realistic business office of the flush but volition non hold out side yesteryear side quarter, or
(e). Something I can't intend of.
I was thinking - falsely peradventure - amongst the disastrous delivery numbers - that the 3rd political party distribution would hold out cutting to zero. I should accept set that supposition inward my note.
J
Note: the post script is an of import business office of this story. My master weblog post was also hasty inward making an supposition well-nigh third-party module sales.
The Trina Solar press liberate updating guidance has me utterly perplexed (and I follow this stock closely).
Here is the telephone commutation text:
The Company estimates its solar module shipments inward the 3rd quarter of 2011 to hold out inward the gain of 372 MW to 375 MW, compared to the Company's previous guidance of 480 MW to 520 MW for the reasons discussed below. Additionally, for the 3rd quarter of 2011, the Company estimates:
* Gross margin relating to its in-house wafer production together with module production to hold out inward the gain of 18% to 19%, inward describe of piece of occupation amongst the Company's previous guidance of high teens inward pct terms; and
* Overall gross margin to hold out inward the gain of 10% to 11%, which includes a non-cash inventory write downwardly of some $19 million, compared to the Company's previous guidance of mid to high teens inward pct terms.This had me reaching for my calculator. Shipments of 372-375 MW - lets telephone shout out upwards it 374 MW every bit a reasonable average. Gross margin of 18% to 19% from wafer production - thence lets telephone shout out upwards it 18.5 percent together with in-line amongst their guidance. Gross margin of 10% to 11% - lets telephone shout out upwards it 10.5% - later an inventory write downwardly of some $19 1000000 (which compares to the quondam high-teens margin).
So yesteryear elementary subtraction nosotros guess that viii pct points of margin represents $19 million. This suggests that the full revenue is = $19 1000000 /.08 = $237.5 million.
But that is the revenue from 374 MW - thence revenue per watt = $237.5 million/ 374 1000000 watts = $0.635 per watt.
The lowest solar panel toll mentioned inward whatsoever analyst study I accept seen is $1.08 per watt.
Under 64 cents per watt is either a catastrophe inconsistent amongst whatsoever observable solar panel toll or at that topographic point is a meaning accuse the society is non disclosing.
Which is it?
John
Post script. Some people accept observed the typical three percent departure betwixt IN HOUSE wafer production together with END GROSS MARGIN - the departure existence 3rd political party panels they purchase inward together with and thence distribute.
They together with thence calculate 5.5 percent margin departure - implying ASP inward the 90s. Plausible - but however a disaster.
I had discounted this. Reason: I did non intend at that topographic point would hold out many third-party production sales when they are storing their ain materials inward warehouse together with can't sell it together with are cutting production. That was a guess only. Their ain production cutting is thence severe that third-party sales through their channel merely await unlikely.
But maybe at that topographic point genuinely are large 3rd political party sales remaining. There mightiness hold out a few reasons - but I am opened upwards to suggestion. Here goes for some thoughts:
(a). They are contractually obliged to sell for 3rd parties together with they accept contractual expenses larger than they are telling us, or
(b). They however sell for 3rd parties because the 3rd parties tin give notice deliver cheaper than their marginal manufacturing cost, or
(c). The 3rd political party materials is higher quality, or
(d). The collapse inward book was thence full that at that topographic point were 3rd political party sales inward the get-go of the quarter but non inward the terminate - thence 3rd political party sales were a realistic business office of the flush but volition non hold out side yesteryear side quarter, or
(e). Something I can't intend of.
I was thinking - falsely peradventure - amongst the disastrous delivery numbers - that the 3rd political party distribution would hold out cutting to zero. I should accept set that supposition inward my note.
J
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