ETF Impact From Solar Earnings [Trina Solar Limited (ADR), First Solar, Inc., ReneSola Ltd. (ADR), Canadian Solar Inc.]

solarSweta Killa: China’s second-largest solar panel manufacturer – Trina Solar (NYSE:TSL) – was a star performer on the New York Stock Exchange in Wednesday trading session as the stock jumped as high as 31% at the close. This represents the biggest one-day increase in more than five years.

The huge gain for this solar firm came after it reported astounding results for the first quarter of 2014. Trina solar posted profits for the third consecutive quarter with earnings of 37 cents per ADS. This is well above the Zacks Consensus Estimate of loss per share of $0.01 and year-ago loss of 90 cents.

Revenues climbed 71% year over year to $444.8 million, beating the Zacks Consensus Estimate of $445 million. The incredible performance was credited to a rebound in the solar industry after a two-year slump, higher solar panel prices and growing demand in Japan, China and the U.S. In fact, sales nearly doubled in the U.S. growing to 31.9% from 16.3% from the prior quarter while Japan sales growth more than doubled to 30.4% from 12.6%.

The company shipped 558 MW of photovoltaic panels in the first quarter and expects to ship 950–1010 MW and 3.6–3.8 GW in the second quarter and full-year 2014, respectively. Moreover, Trina Solar is emerging as a strong leader in the global space thanks to its large footprint, strong balance sheet and improving earnings and revenues.

Market Impact

No doubt, Trina’s solid beat was well received by investors and has spread optimism in the broad solar industry, which has been the major victim of the sell-off in the growth and momentum stocks that started in late March (read: The Momentum Stock Crash Puts These ETFs in Focus).

As a result, the strong run up in the price of TSL sent other solar stocks higher on the day. These include ReneSola (SOL) which was up 11.74%, Yingli Green Energy (YGE) (up 10.18%), Canadian Solar (CSIQ) (up 7.10%) and JA Solar (JASO) (up 5.18%). If this wasn’t enough, the solid trading was also been felt in the ETF world. The Guggenheim Solar ETF (TAN) gained 5.2% while Market Vectors Solar Energy ETF (KWT) added 4% on the day.

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