Trina Solar (NYSE: TSL) beat analyst expectations Friday when it posted a first-quarter profit that more than doubled from a year ago. But shares fell more than 8 percent after the company forecast that it would face a margin squeeze in the next quarter.

The Chinesesolar-panel manufacturer reported a first-quarter net income of $12.9 million, or 51 cents per share, compared with $4.8 million, or 22 cents per share, in the first quarter of 2007. Company sales increased to $120.7 million, nearly triple the $42.5 million in revenue from the year before.

Analysts had predicted earnings of 49 cents per share on revenues of $117.2 million, according to Reuters Estimates.

The company said its gross margin was 25.8 percent, up from 22.3 percent in the first quarter of 2007, but down from 27.2 in the fourth quarter of 2007

The company also braced investors for further margin shrinkage, saying it expects its gross margin to shrink to between 23 percent and 25 percent next quarter. The company blamed the rising price of silicon, among other culprits, for the decline.

The company also forecast that net revenues for the year will reach between $770 million and $808 million, with margins remaining between 23 percent and 25 percent.

Trina's stock fell $4.02 per share to $45.61 per share in recent trading.

Trina is far from alone in experiencing financial wounds from rising silicon prices. The silicon shortage that haunts the industry has resulted in price hikes, leading a number of solar companies to also suffer shrinking margins (see LDK Warns Investors of Tightening Margins, SunPower Margins Fall; Income Beats Expectations, Chinese Solar May Trade Margins for Market Share, Solar Sector Heading for a Shakeout and Solar Margins About to Shrink?).

Industry watchers have been eagerly looking for signs that the silicon shortage is coming to an end, and analysts have speculated the end could come as early as this year or as late as 2010 (see Trina Cancels $1B Silicon Plant … Is Shortage Ending? Silicon Still a Hot Topic at Photon and Panelists Debate When the Silicon Shortage Will End).