Canadian Solar (CSIQ) Earnings Better Than Headline Number

Canadian Solar (CSIQ) reported results before the bell this morning and the results were much better than expected when you take out one time losses due to forex losses and internal audits.  On a non GAAP basis, the company reported an EPS of .40/share on revenues of $328.7 million.  That’s significantly ahead of the analyst estimates of an EPS at .15 and revenue at $306 million.  The results were much better than the headlines would have you believe and the non GAAP number indicates the organic growth is sound.  While the EPS number came in 20% lower than the year ago period, revenues increased 188%.  It will be interesting to see how traders react to these numbers in the coming days.  Today, the stock is down about 2%.

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Here are some highlights of comments made by CEO Shawn Qu:

– demand and pricing remained strong and that’s expected for rest of year
– Q2 shipments above prior guidance
– reduction of 3rd party solar cell purchases increasing margins and they expect that to continue by reducing 3rd party purchases 15% this quarter and another 40% in Q4.
– expects module pricing to remain stable through rest of year
– cell conversion efficiency exceeding 18%
– expects solar system business to begin contributing meaningful income in Q4

Looking ahead, the company expects shipments between 190 – 200MW this quarter and gross margins of 14.5 – 15.5%.  For the full year, the company is reiterating shipment guidance of 700 – 800MW.  On the capacity side, they expect to expand cell manufacturing to 800MW by the end of this quarter and to 1.3GW by early next year.


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