We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Canadian Solar (CSIQ) Up 21.2% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Canadian Solar (CSIQ - Free Report) . Shares have added about 21.2% 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 & Revenues Beat Estimates
Canadian Solar reported third-quarter 2020 earnings of 15 cents per share in contrast to the Zacks Consensus Estimate of a loss of 4 cents. However, the reported earnings figure deteriorated 84.4% from the year-ago quarter’s earnings of 96 cents per share.
The year-over-year deterioration can be attributed to higher cost of revenues that the company incurred in the reported quarter.
Total Revenues
Canadian Solar’s total revenues of $914.4 million outpaced the Zacks Consensus Estimate of $861 million by 6.3%. Net revenues in the reported quarter also comfortably exceeded the company’s guidance of $840-$860 million.
Moreover, the top line improved 20.3% from $759.9 million reported in third-quarter 2019. The year-over-year improvement is driven by higher module shipments and project sales.
Operational Update
Solar module shipments in the quarter totaled 3,169 megawatts (MW), up 33% on a year over year basis and grew 9% from 2,905 MW in the second quarter of 2020. Growth in shipments was driven by strong global demand growth. Shipments also exceeded the guidance range of 2.9-3.1 MW.
Gross profit amounted to $178.4 million, down 12.3% from the year-ago quarter’s $198.9 million. Gross margin was 19.5% in the quarter, indicating a contraction of 670 basis points from the third quarter of 2019. However, it came above the guidance range of 14-16%.
Total operating expenses were $119 million, up 0.5% year over year. Selling expenses totaled $54 million, up 15% year over year. General and administrative expenses were $56.2 million, down 8.6% year over year. Research and development expenses were $14.1 million, up 22.3% from the year-ago period.
Income tax expenses in the third quarter of 2020 were $24 million compared with $10 million in the third quarter of 2019.
Interest expenses were $17.9 million, down from $19.2 million recorded in the year-ago period.
Financial Update
As of Sep 30, 2020, cash and cash equivalents totaled $1,103 million, up from $668.8 million as of Dec 31, 2019.
Long-term debt as of Sep 30, 2020 was $623.6 million, up from $619.5 million as of Dec 31, 2019.
Guidance
For fourth-quarter 2020, Canadian Solar expects shipments of 2.9-3.0 GW. This guidance includes approximately 350 MW of shipments to its utility-scale solar power projects that may not be recognized as revenues. Total revenues are projected within $980-$1,015 million, while gross margin is expected in the band of 8-10%.
The Zacks Consensus Estimate for the company’s third-quarter revenues is pegged at $1,140 million, higher than the guided range.
For 2020, Canadian Solar now expects total module shipments in the range of 11.2-11.3 GW, compared with the prior guidance of 11-12 GW.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -179.33% due to these changes.
VGM Scores
Currently, Canadian Solar has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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. It's no surprise Canadian Solar has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Canadian Solar (CSIQ) Up 21.2% Since Last Earnings Report?
A month has gone by since the last earnings report for Canadian Solar (CSIQ - Free Report) . Shares have added about 21.2% 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 & Revenues Beat Estimates
Canadian Solar reported third-quarter 2020 earnings of 15 cents per share in contrast to the Zacks Consensus Estimate of a loss of 4 cents. However, the reported earnings figure deteriorated 84.4% from the year-ago quarter’s earnings of 96 cents per share.
The year-over-year deterioration can be attributed to higher cost of revenues that the company incurred in the reported quarter.
Total Revenues
Canadian Solar’s total revenues of $914.4 million outpaced the Zacks Consensus Estimate of $861 million by 6.3%. Net revenues in the reported quarter also comfortably exceeded the company’s guidance of $840-$860 million.
Moreover, the top line improved 20.3% from $759.9 million reported in third-quarter 2019. The year-over-year improvement is driven by higher module shipments and project sales.
Operational Update
Solar module shipments in the quarter totaled 3,169 megawatts (MW), up 33% on a year over year basis and grew 9% from 2,905 MW in the second quarter of 2020. Growth in shipments was driven by strong global demand growth. Shipments also exceeded the guidance range of 2.9-3.1 MW.
Gross profit amounted to $178.4 million, down 12.3% from the year-ago quarter’s $198.9 million. Gross margin was 19.5% in the quarter, indicating a contraction of 670 basis points from the third quarter of 2019. However, it came above the guidance range of 14-16%.
Total operating expenses were $119 million, up 0.5% year over year. Selling expenses totaled $54 million, up 15% year over year. General and administrative expenses were $56.2 million, down 8.6% year over year. Research and development expenses were $14.1 million, up 22.3% from the year-ago period.
Income tax expenses in the third quarter of 2020 were $24 million compared with $10 million in the third quarter of 2019.
Interest expenses were $17.9 million, down from $19.2 million recorded in the year-ago period.
Financial Update
As of Sep 30, 2020, cash and cash equivalents totaled $1,103 million, up from $668.8 million as of Dec 31, 2019.
Long-term debt as of Sep 30, 2020 was $623.6 million, up from $619.5 million as of Dec 31, 2019.
Guidance
For fourth-quarter 2020, Canadian Solar expects shipments of 2.9-3.0 GW. This guidance includes approximately 350 MW of shipments to its utility-scale solar power projects that may not be recognized as revenues. Total revenues are projected within $980-$1,015 million, while gross margin is expected in the band of 8-10%.
The Zacks Consensus Estimate for the company’s third-quarter revenues is pegged at $1,140 million, higher than the guided range.
For 2020, Canadian Solar now expects total module shipments in the range of 11.2-11.3 GW, compared with the prior guidance of 11-12 GW.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -179.33% due to these changes.
VGM Scores
Currently, Canadian Solar has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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. It's no surprise Canadian Solar has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.