Trina Solar Limited (ADR) (TSL), Yingli Green Energy Hold. Co. Ltd. (ADR) (YGE), Canadian Solar Inc. (CSIQ): This Week in Solar

It’s been a wild week for solar stocks, driven by an earnings season that’s seen everything from blowouts to complete duds. The following chart shows how some of the major newsmakers shook out — in some cases, even those bouncing back later in the week ended down.

FSLR Total Return Price data by YCharts

I’ll cover the major earnings news of the week and what investors should take away as earnings season moves forward.

Chinese earnings pick up steam
Chinese manufacturers began announcing preliminary results, and they’re beginning to improve. Trina Solar Limited (ADR) (NYSE:TSL) said shipments would be 630 MW to 660 MW, which was 130 MW above previous guidance. Gross margin of 11% to 12% was also well above the middle single guidance given last quarter.

Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE) saw similar improvement, with increasing gross margin in a range of 11% to 12%, and said shipments will grow 23% to 24% sequentially, from a previous guidance of percentage growth in the low to mid-teens.

Trina Solar Limited (ADR) (NYSE:TSL) and Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE) offered guidance figures, and we still don’t know what the bottom line looked like, but Canadian Solar Inc. (NASDAQ:CSIQ) did report its earnings for the quarter, seeing similar results. The company shipped 455 MW, generated a gross margin of 12.8%, and lost $12.6 million, or $0.29 per share.

Conditions are clearly improving in the Chinese manufacturer market as seen by improving margins across the board and higher shipments. What these companies aren’t reporting is a profit at this point. If Chinese demand picks up, margins improve in Europe, and Japan continues to have high sales prices, then we may see companies with low debt loads come close to a profit later this year.

First Solar and SunEdison report duds
The big losers of the week were First Solar, Inc. (NASDAQ:FSLR) and Sunedison Inc (NYSE:SUNE), which reported disappointing earnings. First Solar, Inc. (NASDAQ:FSLR)’s results show a particularly sharp decline in demand despite the solar industry’s strength this year. The company’s pipeline of solar projects is down so far this year, and with little to no demand outside its systems business, earnings are falling. To make matters worse, cost per watt of $0.67 is similar to the sale price of some Chinese modules, but instead of an increasing utilization rate we saw at Trina Solar Limited (ADR) (NYSE:TSL), Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE), and Canadian Solar Inc. (NASDAQ:CSIQ), First Solar, Inc. (NASDAQ:FSLR)’s utilization is falling.