Canadian Solar Inc. (CSIQ - Free Report) reported adjusted fourth-quarter 2018 earnings of $1.61 per share, which outpaced the Zacks Consensus Estimate of 87 cents by 85.5%.
Including one-time adjustments, the company reported earnings of $1.81 per share compared with $1.01 in the year-ago quarter.
For 2018, the company’s adjusted earnings came in at $3.28 per share, which missed the Zacks Consensus Estimate of $3.33.
Total Revenues
In the reported quarter, total revenues of this solar cell manufacturer came in at $901 million, beating the Zacks Consensus Estimate of $874.1 million by 3.7%. However, the top line declined 18.7% from $1,108.7 million reported in fourth-quarter 2017.
For 2018, Canadian Solar generated revenues of $3.74 billion, which comfortably beat the Zacks Consensus Estimate of $3.62 billion. However, the top line declined 10.4% from $3.39 billion reported at the end of 2017.
Operational Update
Solar module shipments in the quarter totaled 1,951 megawatts (MW), up 22.7% from third-quarter’s shipment of 1,590 MW. The figure matched the upper end of management’s revised guidance of 1.90-1.95 gigawatt (GW).
Gross profit was $271.3 million, up 24.1% from the year-ago level of $218.6 million. Gross margin was 28.3% in the quarter (excluding the CVD reversal benefits). Including the benefits, gross margin was 30.1% compared with 19.7% in the fourth quarter of 2017.The year-over-year increase in gross margin was driven by the benefit of the CVD reversal and lower blended module manufacturing cost,
Total operating expenses amounted to $134.7 million, up 52.4% year over year. Selling expenses totaled $44.4 million, up 11.3% year over year. General and administrative expenses were $81.3 million, up 16.7% year over year. Research and development expenses were $15.4 million compared with $8.6 million in the year-ago period.
Interest expenses were $23 million, down from $33.5 million recorded in the year-ago period..
Financial Update
As of Dec 31, 2018, cash and cash equivalents were $444.3 million, down from $561.7 million as of Dec 31, 2017.
Long-term debt as of Dec 31, 2018 was $393.6 million, down from $404.3 million as of Dec 31, 2017.
Business Developments
During the reported quarter, Canadian Solar’s subsidiary, Recurrent Energy, signed a build-transfer agreement with Entergy Mississippi for a 100 MWac solar photovoltaic project for a base purchase price of approximately $138.4 million. Moreover, the company entered into a 10-year power purchase agreement with TrailStone GmbH for the electricity produced by a 17.6 MWp solar PV plant portfolio in Sicily, Italy
Also, Recurrent Energy signed a 25-year power purchase agreement for the 63 MWac/88 MWp Stanford Solar Generating Station #2 in the reported quarter.
Guidance
For first-quarter 2019, Canadian Solar expects shipments in the range of 1.30-1.40 GW, including approximately 50 MW of shipments to the company's utility-scale solar power projects. Total revenues are projected in the band of $450-$480 million while gross margin is expected to be in the range of 16-18%.
For 2019, Canadian Solar expects shipments in the range of 7.40-7.80 GW. Total revenues for the full year are projected in the band of $3.5-$3.8 billion. Currently, the Zacks Consensus Estimate for full-year revenues is pegged at $4.01 billion, higher than the guided range.
Zacks Rank
Canadian Solar currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Recent Solar Releases
SunPower Corp. (SPWR - Free Report) incurred adjusted loss of 21 cents per share in fourth-quarter 2018, narrower than the Zacks Consensus Estimate of a loss of 38 cents.
SolarEdge Technologies (SEDG - Free Report) reported fourth-quarter 2018 adjusted earnings of 63 cents per share, which missed the Zacks Consensus Estimate of 70 cents by 10%.
First Solar Inc. (FSLR - Free Report) reported fourth-quarter 2018 earnings of 49 cents per share, which missed the Zacks Consensus Estimate of 64 cents by 23.1%.
Zacks' Top 10 Stocks for 2019
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Zacks Names "Single Best Pick to Double"
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Canadian Solar Inc. (CSIQ - Free Report) reported adjusted fourth-quarter 2018 earnings of $1.61 per share, which outpaced the Zacks Consensus Estimate of 87 cents by 85.5%.
Including one-time adjustments, the company reported earnings of $1.81 per share compared with $1.01 in the year-ago quarter.
For 2018, the company’s adjusted earnings came in at $3.28 per share, which missed the Zacks Consensus Estimate of $3.33.
Total Revenues
In the reported quarter, total revenues of this solar cell manufacturer came in at $901 million, beating the Zacks Consensus Estimate of $874.1 million by 3.7%. However, the top line declined 18.7% from $1,108.7 million reported in fourth-quarter 2017.
For 2018, Canadian Solar generated revenues of $3.74 billion, which comfortably beat the Zacks Consensus Estimate of $3.62 billion. However, the top line declined 10.4% from $3.39 billion reported at the end of 2017.
Operational Update
Solar module shipments in the quarter totaled 1,951 megawatts (MW), up 22.7% from third-quarter’s shipment of 1,590 MW. The figure matched the upper end of management’s revised guidance of 1.90-1.95 gigawatt (GW).
Gross profit was $271.3 million, up 24.1% from the year-ago level of $218.6 million. Gross margin was 28.3% in the quarter (excluding the CVD reversal benefits). Including the benefits, gross margin was 30.1% compared with 19.7% in the fourth quarter of 2017.The year-over-year increase in gross margin was driven by the benefit of the CVD reversal and lower blended module manufacturing cost,
Total operating expenses amounted to $134.7 million, up 52.4% year over year. Selling expenses totaled $44.4 million, up 11.3% year over year. General and administrative expenses were $81.3 million, up 16.7% year over year. Research and development expenses were $15.4 million compared with $8.6 million in the year-ago period.
Interest expenses were $23 million, down from $33.5 million recorded in the year-ago period..
Financial Update
As of Dec 31, 2018, cash and cash equivalents were $444.3 million, down from $561.7 million as of Dec 31, 2017.
Long-term debt as of Dec 31, 2018 was $393.6 million, down from $404.3 million as of Dec 31, 2017.
Business Developments
During the reported quarter, Canadian Solar’s subsidiary, Recurrent Energy, signed a build-transfer agreement with Entergy Mississippi for a 100 MWac solar photovoltaic project for a base purchase price of approximately $138.4 million. Moreover, the company entered into a 10-year power purchase agreement with TrailStone GmbH for the electricity produced by a 17.6 MWp solar PV plant portfolio in Sicily, Italy
Also, Recurrent Energy signed a 25-year power purchase agreement for the 63 MWac/88 MWp Stanford Solar Generating Station #2 in the reported quarter.
Guidance
For first-quarter 2019, Canadian Solar expects shipments in the range of 1.30-1.40 GW, including approximately 50 MW of shipments to the company's utility-scale solar power projects. Total revenues are projected in the band of $450-$480 million while gross margin is expected to be in the range of 16-18%.
For 2019, Canadian Solar expects shipments in the range of 7.40-7.80 GW. Total revenues for the full year are projected in the band of $3.5-$3.8 billion. Currently, the Zacks Consensus Estimate for full-year revenues is pegged at $4.01 billion, higher than the guided range.
Zacks Rank
Canadian Solar currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Recent Solar Releases
SunPower Corp. (SPWR - Free Report) incurred adjusted loss of 21 cents per share in fourth-quarter 2018, narrower than the Zacks Consensus Estimate of a loss of 38 cents.
SolarEdge Technologies (SEDG - Free Report) reported fourth-quarter 2018 adjusted earnings of 63 cents per share, which missed the Zacks Consensus Estimate of 70 cents by 10%.
First Solar Inc. (FSLR - Free Report) reported fourth-quarter 2018 earnings of 49 cents per share, which missed the Zacks Consensus Estimate of 64 cents by 23.1%.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
See Stocks Today >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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