Unexpectedly higher shipments drove Trina 2Q14 revenues to USD519mn

Net profit was down, though.

Trina Solar reported strong 2Q14 revenues of USD519mn, up 17% q-q, due to higher-than-expected shipments of 943MW, up 69% q-q.

According to a research note from Nomura, meanwhile, net profit was down 60% q-q at USD10.7mn mainly due to lower ASPs as a result of the higher proportion of sales in China and the US, and higher operating expenses due to the increase in freight expenses on higher shipment volume.

Trina has also increased its FY14 shipment guidance from 3.1GW-3.5GW to 3.6GW-3.8GW with gross margins expectations in mid-teens.

Here's more from Nomura:

3Q14 shipment guidance at 1060MW-1120MW was in line with our expectation of 1094MW; however, margins guidance in the low end of mid-teens is below our estimate of 18.7%.

We believe shipment guidance looks very good; however, we are concerned about:

1) inventory in dollar terms which continues to rise (USD451mn in 2Q from just USD244.5mn in 4Q13; and

2) higher proportion of sales from China may put downward pressure on gross margins.

Trina Solar reported 2Q14 net profit of USD10.7mn (-60%% q-q) and 43% below our estimate – as gross margins were at 15.4% (-5.1pp q-q) vs. our estimate of 18.0%. ASPs were down slightly from USD0.66/W in 1Q14 to USD0.65/W in 2Q14, while silicon costs rose from USD0.10/W in 1Q14 to USD0.11/W in 2Q14.

3Q14 shipment guidance at 1060MW-1120MW was in line with our expectation of 1094MW. In addition, Trina expects to ship 130~150MW for its own project constructions, in line with our forecast of 150MW.

That said, 3Q14 gross margin guidance was in low-mid-teens vs. our estimate of 16.7%.