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Canadian Solar (CSIQ) Q4 Earnings Top Estimates, Revenues Up Y/Y

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Canadian Solar Inc. (CSIQ - Free Report) reported fourth-quarter 2020 earnings of 11 cents per share. The Zacks Consensus Estimate was pegged at a loss of 55 cents. However, the bottom line deteriorated 90.1% from the year-ago quarter’s earnings of $1.12 per share.

The year-over-year fall can be attributed to higher cost of revenues as well as operating expenses that the company incurred in the reported quarter compared with fourth-quarter 2019.  

In 2020, the company reported earnings of $2.38 per share compared with $2.83 in 2019. Full-year earnings also topped the consensus estimate of $1.65.

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

 

Total Revenues

Canadian Solar’s total revenues of $1,041 million outpaced the Zacks Consensus Estimate of $997 million by 4.3%. Net revenues in the reported quarter also comfortably exceeded the company’s guidance of $980-$1,015 million.

Moreover, the top line improved 13.2% from $919.7 million reported in fourth-quarter 2019. The improvement was driven by higher module shipments.

In 2020, the company generated revenues worth $3.48 billion, up from $3.20 million in 2019. Full-year revenues also surpassed the Zacks Consensus Estimate of $3.43 billion.

Operational Update

Solar module shipments in the quarter totaled 2,998 megawatts (MW), up 22% on a year-over-year basis but fell 5.4% from 3,169 MW in the third quarter of 2020. Shipments came in within the company’s guidance of 2.9-3.0 MW.

Gross profit amounted to $141.1 million, down 38.5% from the year-ago quarter’s $229.5 million. Gross margin was 13.6% in the quarter, indicating a contraction of 1140 basis points. However, it came above the guidance of 8-10%. The year-over-year gross margin decline was mainly due to the previously expected increase in manufacturing costs.

Total operating expenses were $138.6 million, up 17.4% year over year. Selling and distribution expenses totaled $64.1 million, up 28%. General and administrative expenses were $70.1 million, up 9.3% year over year.
Research and development expenses were $10 million, down 1.4% from the year-ago period.

Income tax benefit in the fourth quarter of 2020 was $2 million against income tax expenses of $25 million in the fourth quarter of 2019.
Interest expenses were $18 million, down from $19.7 million recorded in the year-ago quarter.

Financial Update

As of Dec 31, 2020, cash and cash equivalents totaled $1,178.8 million, up from $668.8 million as of Dec 31, 2019.

Long-term debt as of Dec 31, 2020 was $446.1 million, up from $619.5 million on Dec 31, 2019.

Guidance

For first-quarter 2021, Canadian Solar expects shipments of 3.0-3.2 gigawatt (GW). This guidance includes approximately 300 MW of shipments to its utility-scale solar power projects that may not be recognized as revenues. Total revenues are projected within $1.0-$1.1 billion, while gross margin is expected in the band of 16-18%.

The Zacks Consensus Estimate for the company’s first-quarter revenues is pegged at $988.8 million, lower than the company guided range.

For 2021, Canadian Solar expects total module shipments in the range of 18-20 GW, while that for revenues lie in the band of $5.6-$6.0 billion.

The Zacks Consensus Estimate for the company’s 2021 revenues is pegged at $5.12 billion, lower than the mid-point of the company guided range.

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.

Some Other Solar Releases

Enphase Energy (ENPH - Free Report) reported fourth-quarter 2020 adjusted earnings of 51 cents per share, which surpassed the Zacks Consensus Estimate of 40 cents by 27.5%.

SolarEdge Technologies (SEDG - Free Report) reported fourth-quarter 2020 adjusted earnings of 98 cents per share, which surpassed the Zacks Consensus Estimate of 87 cents by 12.6%.

SunPower Corp. (SPWR - Free Report) reported adjusted earnings of 14 cents per share in fourth-quarter 2020, surpassing the Zacks Consensus Estimate of 10 cents by 40%. The bottom line, however, declined 39% year over year from 23 cents.

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