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Canadian Solar (NASDAQ:CSIQ) -13% in Tuesday’s trading after reporting better than expected Q2 GAAP earnings but cutting its Q3 and full-year revenue guidance well below analyst estimates, citing a sharp decline in module average selling prices in Q2.
Despite the lower market prices, Canadian Solar (CSIQ) said Q2 net profit hit a record of $170M, or $2.39/share, compared to $84M in Q1 and $74M in the year-earlier quarter.
Q2 module shipments rose 62% Y/Y and 35% Q/Q to 8.2 GW, within company guidance of 8.1-8.4 GW, boosting net sales up 2% Y/Y and 39% Q/Q to $2.4B.
Q2 gross margin edged lower to 18.6% from 18.7% in Q1, and below company guidance of 19%-21%.
Canadian Solar (CSIQ) now sees full-year revenues coming in at $8.5B-$9B compared to previous guidance of $9B-$9.5B and below $9.35B analyst consensus, and Q3 sales of $1.9B-$2.1B, well below $2.51B consensus; full-year module shipments outlook was maintained at 30-35 GW.
Q3 gross margin is forecast at 17.5%-19.5% with module shipments of 8.5 GW-8.7 GW; for the full year.
“We expect margins to rebalance through the year as we restrict the production of non-vertically integrated solar module shipments while strengthening our leadership position in premium markets and segments,” Chairman and CEO Shawn Qu said.
J.P. Morgan analyst Mark Strouse, who rates Canadian Solar (CSIQ) at Neutral, said Q3 revenue and gross margin guidance was below expectations, and he lowered his stock price target to $39 from $46 following the company’s Q3 and full-year guidance cut.
