Canadian Solar Q2 Results Top Estimates, Sees Q3 Revenues In Line

(RTTNews) - Solar power products company Canadian Solar Inc. (CSIQ) reported Wednesday a profit for the second quarter compared to a loss last year, reflecting strong margin improvement and double-digit revenue growth.

Both earnings per share and quarterly revenues topped analysts' expectations. The company also provided revenue guidance for the third quarter, in line with Street view.

"Our second quarter shipments and revenue came in above the high end of our guidance led by strong module demand out of Japan, Germany, the UK and the US, as well as progress in the build-out of our utility-scale solar projects in Canada," Chairman and CEO Dr. Shawn Qu said in a statement.

The West Guelph, Canada-based company reported net income attributable to the company of a record $55.78 million or $0.95 per share for the second quarter, compared to a net loss of $12.60 million or $0.29 per share in the prior-year quarter.

On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.58 per share for the quarter. Analysts' estimates typically exclude special items.

The company recorded a loss on change in fair value of derivatives of $3.2 million in the latest quarter, compared to gain of $1.8 million in the year-ago quarter. Net foreign exchange gain in the quarter was $7.6 million, compared to net foreign exchange loss of $20.5 million in the prior-year quarter.

Net revenue for the quarter surged 64.0 percent to a record $623.77 million from $380.38 million in the same quarter last year, and topped six Wall Street analysts' consensus estimate of $577.65 million.

The Americas revenue more than doubled to $346.0 million from $143.9 million, and Europe revenues surged to $91.6 million from $40.2 million, while Asia and others revenue declined to $186.2 million from $196.3 million in the year-ago quarter.

Total solar module shipments in the quarter increased to a record 646 MW from 455 MW in the year-ago quarter.

Operating margin for the quarter expanded 770 basis points to 10.9 percent from 3.2 percent last year, as gross margin improved 620 basis points to 19.0 percent from a year ago, primarily due to higher module shipments, higher module average selling price ("ASP"), and lower module manufacturing cost.

At the end of the second quarter, the Company had a pipeline of late stage utility-scale solar projects totaling about 1.3 GW DC, including owned and joint-venture projects as well as projects where the company provides engineering, procurement and construction or EPC, services.

During the quarter, the company entered into an EPC agreement with Kingston Solar LP, a solar energy partnership formed by Samsung Renewable Energy Inc. for the construction of a 140 MW DC utility-scale solar power plant, which is expected to generate revenue of over C$300 million for Canadian Solar.

Looking ahead to the third quarter, Canadian Solar forecasts revenues between $760 million and $810 million, and module shipments in a range of about 720 MW to 750 MW. Gross margin is also projected between 19 and 21 percent. Analysts expect the company to report revenues of $784.75 million for the quarter.

"We believe we remain one of the solar industry's best positioned companies given our diverse manufacturing footprint and advanced-stage project pipeline in Canada, Japan, the U.S., and China. We are making steady progress in key developing markets in Asia, the Middle East, Latin America and Africa, and we continue to see robust demand for our solar energy solutions products and services across all geographies and market segments," Qu added.

CSIQ closed Tuesday's regular trading session at $24.97, down $1.39 on a volume of 4.44 million shares.