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Canadian Solar Q1 Earnings Top Estimates, Revenues Fall Y/Y

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Canadian Solar Inc. (CSIQ - Free Report) reported adjusted first-quarter 2019 loss of 29 cents per share, narrower than the Zacks Consensus Estimates of a loss of 44 cents. However, the company’s adjusted first-quarter 2018 earnings were 72 cents per share.

Total Revenues

In the reported quarter, total revenues of this solar cell manufacturer came in at $484.7 million, beating the Zacks Consensus Estimate of $471 million by 2.9%. However, the top line declined 66% from $1,425 million reported in first-quarter 2018.

Operational Update

Solar module shipments in the quarter totaled 1,575 megawatts (MW), down 19.3% from fourth-quarter’s shipment of 1,951 MW. However, the figure exceeded management’s first-quarter 2019 guidance of 1.30-1.40 gigawatt (GW).

Gross profit was $107.4 million, down 25.4% from the year-ago quarter’s level of $143.9 million. Gross margin was 22.2% in the quarter (excluding the CVD reversal benefits). Including the benefits, gross margin was 30.1% compared with 10.1% in the first quarter of 2018, he year-over-year increase was driven by a lower blended module manufacturing cost compared to its previous forecast.

Total operating expenses amounted to $100.8 million, up 53.4% year over year. Selling expenses totaled $37.9 million, down 10.4% year over year. General and administrative expenses were $51.4 million, up 5.3% year over year. Research and development expenses were $13.2 million compared with $9.5 million in the year-ago period.

Interest expenses were $21.7 million, down from $29.6 million recorded in the year-ago period.

Canadian Solar Inc. Price, Consensus and EPS Surprise

Canadian Solar Inc. Price, Consensus and EPS Surprise

Canadian Solar Inc. price-consensus-eps-surprise-chart | Canadian Solar Inc. Quote

Financial Update

As of Mar 31, 2019, cash and cash equivalents were $370.2 million, down from $444.3 million as of Dec 31, 2018.

Long-term debt as of Mar 31, 2019, was $433.5 million, up from $393.6 million as of Dec 31, 2018.

Q2 2019 Guidance

For second-quarter 2019, Canadian Solar expects shipments in the range of 1.95-2.05 GW. This new guidance includes approximately 50 MW of
shipments to its utility-scale solar power projects that may not be recognized as revenues in the second quarter 2019.

Total revenues are projected to be $970-$1,010 million, while gross margin is expected to be 13-15%, reflecting the inclusion of the Mustang project sale. Excluding the Mustang project sale, gross margin for the second quarter is expected to be between 16% and 18%.

Zacks Rank

Canadian Solar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Solar Releases

First Solar Inc. (FSLR - Free Report) incurred a loss of 64 cents per share in first-quarter 2019, wider than the Zacks Consensus Estimate of a loss of 13 cents.

Sunrun Inc. (RUN - Free Report) incurred a loss of 12 cents per share in first-quarter 2019 against the Zacks Consensus Estimate of earnings of 32 cents.

SolarEdge Technologies, Inc. (SEDG - Free Report) reported first-quarter 2019 adjusted earnings of 64 cents per share, which surpassed the Zacks Consensus Estimate of 62 cents by 3.2%.

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