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Canadian Solar (CSIQ) Up 35.1% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Canadian Solar (CSIQ - Free Report) . Shares have added about 35.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Canadian Solar due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Canadian Solar Q3 Earnings & Sales Lag, Down Y/Y
Canadian Solar Inc. reported adjusted third-quarter 2019 earnings of 66 cents per share, which missed the Zacks Consensus Estimate of 88 cents by 25%. The figure also declined 31.3% from the year-ago level.
GAAP earnings came in at 96 cents per share in the quarter under review compared with $1.04 in third-quarter 2018.
Total Revenues
This solar cell manufacturer’s total revenues of $759.9 million lagged the Zacks Consensus Estimate of $798 million by 4.8%. The top line also declined 1.1% from $768 million reported in third-quarter 2018.
The year-over-year decline was due lower revenues from the sale of solar power plants.
Operational Update
Solar module shipments in the quarter totaled 2,387 megawatts (MW), which exceeded management’s guided range of 2.2-2.3 gigawatt (GW). Solar module shipments recognized in third-quarter revenues totaled 2,156 MW, improving 41.7% from 1,521 MW in the prior-year period.
Gross margin was 23% in the quarter (excluding AD and CVD benefits) compared with 25% in third-quarter 2018.
Total operating expenses were $118.8 million, up 13.7% year over year. The increase in operating costs in the reported quarter was due to higher selling expenses, general and administrative expenses, and research and development expenses.
Interest expenses were $19.2 million, down 7.2% from $20.7 million recorded in the year-ago period.
Financial Update
As of Sep 30, 2019, cash and cash equivalents totaled $526.2 million, up from $444.3 million on Dec 31, 2018.
Long-term borrowings as of Sep 30, 2019 were $525.9 million, up from $393.6 million on Dec 31, 2018.
Guidance
For fourth-quarter 2019, Canadian Solar expects shipments in the range of 2.3-2.4 GW. This guidance includes approximately 190 MW of shipments to its utility-scale solar power projects that may not be recognized as revenues in the fourth quarter. Total revenues are projected within $850-$880 million, while gross margin is expected in the band of 19-21%.
For 2019, Canadian Solar reiterated its guidance for total module shipments in the range of 8.4-8.5 GW. Total revenues for the year are expected in the range of $3.13-$3.16 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -65.7% due to these changes.
VGM Scores
At this time, Canadian Solar has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Canadian Solar has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Canadian Solar (CSIQ) Up 35.1% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Canadian Solar (CSIQ - Free Report) . Shares have added about 35.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Canadian Solar due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Canadian Solar Q3 Earnings & Sales Lag, Down Y/Y
Canadian Solar Inc. reported adjusted third-quarter 2019 earnings of 66 cents per share, which missed the Zacks Consensus Estimate of 88 cents by 25%. The figure also declined 31.3% from the year-ago level.
GAAP earnings came in at 96 cents per share in the quarter under review compared with $1.04 in third-quarter 2018.
Total Revenues
This solar cell manufacturer’s total revenues of $759.9 million lagged the Zacks Consensus Estimate of $798 million by 4.8%. The top line also declined 1.1% from $768 million reported in third-quarter 2018.
The year-over-year decline was due lower revenues from the sale of solar power plants.
Operational Update
Solar module shipments in the quarter totaled 2,387 megawatts (MW), which exceeded management’s guided range of 2.2-2.3 gigawatt (GW). Solar module shipments recognized in third-quarter revenues totaled 2,156 MW, improving 41.7% from 1,521 MW in the prior-year period.
Gross margin was 23% in the quarter (excluding AD and CVD benefits) compared with 25% in third-quarter 2018.
Total operating expenses were $118.8 million, up 13.7% year over year. The increase in operating costs in the reported quarter was due to higher selling expenses, general and administrative expenses, and research and development expenses.
Interest expenses were $19.2 million, down 7.2% from $20.7 million recorded in the year-ago period.
Financial Update
As of Sep 30, 2019, cash and cash equivalents totaled $526.2 million, up from $444.3 million on Dec 31, 2018.
Long-term borrowings as of Sep 30, 2019 were $525.9 million, up from $393.6 million on Dec 31, 2018.
Guidance
For fourth-quarter 2019, Canadian Solar expects shipments in the range of 2.3-2.4 GW. This guidance includes approximately 190 MW of shipments to its utility-scale solar power projects that may not be recognized as revenues in the fourth quarter. Total revenues are projected within $850-$880 million, while gross margin is expected in the band of 19-21%.
For 2019, Canadian Solar reiterated its guidance for total module shipments in the range of 8.4-8.5 GW. Total revenues for the year are expected in the range of $3.13-$3.16 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -65.7% due to these changes.
VGM Scores
At this time, Canadian Solar has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Canadian Solar has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.