Canadian Solar (CSIQ) reported a strong Q3 EPS this morning of $0.69 which was .14/share better than analyst estimates and a more than 50% increase over the year ago quarter.  It’s also a new record for the company. Revenues were below the year ago quarter by about 15% at $213 million, but was better than what analysts expected.

The CEO said European demand remains strong and contributed greatly to the success in the quarter with 179% growth in that market.  Here are some additional comments:

“Our flexible vertical integration model allowed us to capture the sharp increase in market demand during the quarter and to raise our module sales faster than the growth of our internal cell capacity. Our R&D capability is another important competitive differentiator for Canadian Solar.  During the quarter, three of our solar module products recorded the highest scores for P-type solar modules during the PV USA (PTC) tests, which are mandatory for the California Solar Initiatives. Subsequent to the quarter end, we pre-launched our high-output premium products using our enhanced selective emitter technology. These products are expected to have monocrystalline cell conversion efficiencies of 18.5% and multicrystalline cell efficiencies of 17%.
We are also in the process of testing a cost effective two-axis tracker.”

Looking ahead, the company is reiterating its Q4 shipments guidance of 128 – 138MW and full year shipments guidance of 295 – 305MW.  For 2010, the company estimates shipments in the range of 600 – 700MW.  Due to the expectation of doubling its shipments next year, CSIQ will increase solar module production capacity from 820MW to 1GW by the end of next April and cell production capacity from 420MW to 700MW by next June.  The expansion will allow the company to produce about 70% of solar cells internally while outsourcing the rest.

Shares of CSIQ are up about 3% in premarket trading and looking to break out to a new 52 week high.