The sun appears to be shining on solar stocks today with most companies trading higher, something we haven't seen a lot of lately. Maybe more importantly, manufacturing leaders are reporting relatively strong earnings in the sector's darkest hour.

After Yingli Green Energy (NYSE: YGE) reported solid earnings Friday, it was up to Trina Solar (NYSE: TSL) to carry the torch this week. The two companies are more vertically integrated and established than most solar manufacturers in China, so if anyone were going to have a strong quarter, it would be these two.

Good, but not great
Trina didn't hit the cover off the ball, but it held its own in the second quarter. Shipments increased 23.7% to 396 MW, but with sales prices declining revenue was only up 5.2% to $579.5 million. Overall gross margins fell to 17%, while in-house gross margin was 20.4%. So margins are still leading the pack for manufacturers even if they're coming under pressure. But it's the balance sheet where Trina Solar is ahead of the competition.

Unlike competitors like JA Solar (Nasdaq: JASO) and LDK Solar (NYSE: LDK), who rely on short-term loans for financing, Trina has a more traditional balance sheet. Short-term debt stands at $481 million, long-term debt is $383 million, and cash and equivalents are $684 million.

My biggest concern is stagnant costs per watt at Trina Solar given the pressure that module prices are under. In-house cost-per-watt has been stuck at $1.16 for the last three quarters, showing no signs of improving. But at least Trina is making a profit on its modules.

A solar giant stumbles
Suntech Power (NYSE: STP) had a much rougher quarter, posting a loss of $1.44 per share and a gross margin of just 4.1%.

Results were affected by a one-time charge for ending a wafer supply agreement with MEMC Electronic Materials (NYSE: WFR). The company is also taking a charge for ending CSG Solar's operations, another casualty in the solar shakeout. Both of these moves should help Suntech Power's future results, but it's a short-term hit to earnings.

Without these charges, Suntech looks better but isn't exactly a shining star. Gross margins would have been 15.1%, but the company still would have had a net loss of $34 million, or $0.19 per share.

Foolish bottom line
Suntech is improving operations, but with $1.7 billion in short-term borrowing, Trina Solar and Yingli Green Energy are still stronger companies. These two are still this Fool's pick to succeed out of the manufacturers in China.

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