Canadian Solar Shares Down 4% Following Q1 Earnings
Canadian Solar Inc. (NASDAQ:CSIQ) shares dropped more than 4% today following the company’s reported Q1 results, with EPS of $0.14 coming in better than the consensus estimate of ($0.13). Revenue was $1.25 billion, compared to the consensus estimate of $1.31 billion.
The company announced plans to increase vertical integration as it continues to see demand growing. Management estimates that global solar demand will double from 2019 levels in 2022, reaching 200GW.
With its target of 15% market share, analysts at Oppenheimer believe the company is prudent to actively manage its cost structure and control additional elements of its supply chain. The analysts mentioned they are encouraged by energy storage project pipeline growth as they expect storage to prove a meaningful earnings contributor going forward, particularly in Latin America, where they expect grid stability services to be at a premium.
The company also provided guidance for Q2 well ahead of Street expectations. Quarterly revenue is expected to range from $2.2 billion to $2.3 billion.
| Symbol | Price | %chg |
|---|---|---|
| WAAREEENER.NS | 2609.9 | 0 |
| PREMIERENE.NS | 1147 | -0.77 |
| 322000.KS | 25550 | 0 |
| JSKY.JK | 52 | 0 |
Canadian Solar Inc. (NASDAQ: CSIQ) Earnings Report Analysis
- Canadian Solar reported an EPS of -$0.31, missing the estimated EPS but beating the Zacks Consensus Estimate of a $0.44 loss.
- The company's revenue was $1.51 billion, below the estimated $1.71 billion, indicating a 10.69% miss from the Zacks Consensus Estimate.
- Canadian Solar achieved a gross margin of 16.4%, surpassing its guidance and highlighting its operational efficiency.
Canadian Solar Inc. (NASDAQ:CSIQ) is a prominent player in the solar industry, known for its advanced manufacturing capabilities and robust international sales network. The company focuses on solar power products and energy storage solutions, competing with other industry giants in the renewable energy sector. Despite facing significant challenges, Canadian Solar remains committed to innovation and growth.
On December 5, 2024, Canadian Solar reported an earnings per share (EPS) of -$0.31, which was below the estimated EPS of -$0.17. However, this was better than the Zacks Consensus Estimate of a $0.44 loss, marking an earnings surprise of 29.55%. This result is a decline from the $0.32 per share reported in the same quarter last year, highlighting the volatility in the company's earnings performance.
The company generated revenue of approximately $1.51 billion, falling short of the estimated $1.71 billion. This represents a 10.69% miss from the Zacks Consensus Estimate and a decrease from the $1.85 billion reported in the same period last year. Despite this, Canadian Solar has exceeded consensus revenue estimates twice in the last four quarters, indicating some resilience in its revenue generation.
Canadian Solar achieved a gross margin of 16.4%, surpassing its guidance range of 14% to 16%. Dr. Shawn Qu, Chairman and CEO, expressed confidence in the company's strong performance and future prospects, emphasizing its commitment to research and development. The company's early-mover advantage and focus on the energy storage sector are key factors for its growth.
The price-to-sales ratio is 0.12, suggesting the stock is undervalued in terms of revenue. However, the enterprise value to operating cash flow ratio is negative at -9.44, indicating challenges in cash flow generation. The debt-to-equity ratio of 1.81 shows a higher proportion of debt, while the current ratio of 0.94 suggests potential challenges in covering short-term liabilities.
Canadian Solar Shares Dip 5% After Weak Results and Softer Guidance
Canadian Solar (NASDAQ:CSIQ) saw its shares fall around 5% in pre-market trading on Thursday following a wider-than-expected third-quarter loss and a subdued outlook for the fourth quarter.
The company reported a loss of $0.21 per share for the third quarter, missing analyst expectations of a $0.11 loss. Revenue declined 18% year-over-year to $1.51 billion, falling short of the $1.71 billion consensus estimate.
Looking ahead, Canadian Solar projected fourth-quarter revenue between $1.5 billion and $1.7 billion, significantly below Wall Street’s estimate of $2.15 billion. The company attributed the weak guidance to persistent challenges in the solar industry, including external pressures and internal complexities.
Despite these setbacks, Canadian Solar achieved a milestone by growing its energy storage contracted backlog to a record $3.2 billion as of November 30. Additionally, the company finalized a $500 million investment from BlackRock into its Recurrent Energy subsidiary during the quarter, bolstering its financial position.
While Canadian Solar continues to navigate a difficult operating environment, its expanding energy storage business and strategic investments could provide long-term growth opportunities amidst industry headwinds.
