(Bloomberg) -- Trina Solar Ltd., the world’s biggest solar panel maker, expects third-quarter shipments to dip as the industry braces for a global supply glut.
The company, which is preparing to take itself private, expects to ship 1.55 gigawatts to 1.65 gigawatts in the current quarter, down from almost 1.7 gigawatts during the second quarter, according to a statement Tuesday. The shares gained one cent to $10.54 at the close in New York Tuesday.
The slowdown is part of an industrywide falloff that’s due in part to a decision to curb subsidies starting in the second half of this year in China, the world’s largest photovoltaic market. Trina and other manufactures are opening new factories to increase production, sparking concern that a supply glut will trigger an industry downturn.
“We will take prudent and also very cautious approaches,” Trina Chief Financial Officer Merry Xu said on a call with analysts Tuesday. “We hope that this imbalance will not last very long.”
Trina’s second-quarter net income slipped to $40.3 million, or 42 cents an American depositary receipt, compared with $40.9 million, or 42 cents, a year earlier, Changzhou, China-based Trina said in a statement Tuesday. That exceeded the 34-cent average of four analysts’ estimates compiled by Bloomberg. Each ADR is worth 50 ordinary shares.
Revenue rose to 961.6 million from $722.9 million. The company shipped 1.66 megawatts of panels in the quarter, ahead of its May forecast of 1.5 megawatts to 1.6 megawatts. Trina reiterated its 2016 forecast of shipping 6.30 gigawatts and 6.55 gigawatts of panels.
Trina, which surpassed Yingli Green Energy Holding Co. in 2014 as the biggest solar manufacturer, announced Aug. 1 plans to go private in an all-cash $1.1 billion deal. The move, led by a group including Trina Chairman and founder Jifan Gao, reflects frustration within the solar industry that shares prices are not reflecting company performance, as solar installations hit records. In the year leading up to this month’s buyout announcement, the company’s American depository receipts were down 15 percent.
Gao first said he would take the company private in December, with a group backed by a unit of Industrial Bank Co. of China. The plan includes first merging with Fortune Solar Holdings and Red Viburnum.