Well, Fools, it has been a riveting earnings season in the solar sector. I plan on sharing some broader conclusions later, but first, let's quickly glance at the final pair of results.
China Sunergy (Nasdaq: CSUN ) reported negative gross margins for the first quarter, resulting in an operating loss. Like many others in the space, the cell maker is working off high-cost wafer inventories purchased last year. Prices have since plunged, requiring writedowns along the way.
On the brighter side, those lower input costs will soon restore margins to positive territory, even as soon as the second quarter. China Sunergy also pointed to positive operating cash flow during the first quarter, continuing a streak going back a year now.
Whereas investors were willing to look past current weak results in the case of Chinese compatriots like Solarfun Power (Nasdaq: SOLF ) and Canadian Solar (Nasdaq: CSIQ ) , China Sunergy isn't getting much love. One analyst pointed to the company's lack of vertical integration as a source of difficulty, and that's an idea I'll definitely return to in my broader story.
Trina Solar (NYSE: TSL ) , meanwhile, today reported some of the highest margins of any solar module player. Gross margins came in a touch above the 15% to 17% range the company gave in its guidance, putting Trina Solar in Suntech Power (NYSE: STP ) territory. Operating income improved roughly 74% from the previous quarter, to $6.8 million, while some one-time charges took net income into the red.
Trina Solar highlighted its $0.79-per-watt non-silicon manufacturing cost for multicrystalline products (higher-efficiency mono runs about $0.10/watt higher), which initially left me unimpressed. We'd recently seen Suntech Power hit $0.66 per watt, even with the drag from underutilized production lines, and that company is targeting $0.50 to $0.55 within a year or two.
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