Canadian Solar (CSIQ) Reported Mixed Results; Accounting Investigation Complete

I’ve been on vacation for a few days so didn’t get this out Thursday night, but Canadian Solar (CSIQ) reported mixed Q1 results.  The company posted a non GAAP EPS of $0.03, 4 cents lower than the analyst estimate of $0.07 on revenue of $336.9 million, vs estimate of $330.97 million.  Those numbers are big increase over the year ago quarter of -.13 on the EPS side and just $49.5 in revenue.  Shipments came in at 185MW in the quarter which is about a 30% improvement sequentially.  They see shipments down a bit this quarter to 173 – 177MW and are reiterating their full year guidance of 700 – 800MW.

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Perhaps more important than the quarterly earnings is the end of the auditing process which found that transactions identified in the SEC subpoena were properly accounted for.

CEO Dr. Shawn Qu commented on the quarter: “Demand remains very strong in key solar markets worldwide and we continue to gain share or take a leadership position in many new, developing markets. Given current events, we are taking the opportunity to further strengthen our internal controls and procedures to better match our current global market position and to support the ongoing growth we expect from large, well-established customers as well as newer industry participants. Our management also remains focused on our internal cell and wafer expansion. This expansion is consistent with our broader efforts to focus on higher margin products, while also striving to reduce our processing costs. Overall, we are very optimistic looking forward and expect continued growth in revenues, and improvement in gross margins and profitability.”

Shares of CSIQ were initially down nearly 10% Friday, but recovered to finish near the flat line.  In my opinion, shares are becoming compelling at current levels. 



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