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Canadian Solar (CSIQ) Q1 Earnings Top Estimates, Revenues Up Y/Y

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Shares of Canadian Solar Inc. (CSIQ - Free Report) decline 0.6% to reach $39.05 on May 21, reflecting investors’ skepticism following its first-quarter 2021 results.

The company reported first-quarter 2021 adjusted earnings of 36 cents per share, which surpassed the Zacks Consensus Estimate of 28 cents by 28.6%. The bottom-line figure, however, declined 74.3% from $1.40 reported in the prior-year quarter.

Including one-time items, GAAP earnings came in at 36 cents per share in the quarter under review compared with $1.84 in first-quarter 2020.

Total Revenues

This solar cell manufacturer’s total revenues of $1,089.3 million beat the Zacks Consensus Estimate of $1,038 million by 5%. The top line also improved a solid 31.9% from $825.6 million reported in first-quarter 2020. The year-over-year improvement is attributable to solid module shipments and project sales.

Operational Update

Solar module shipments in the quarter totaled 3,139 megawatts (MW), which exceeded the midpoint of the guided range of 3-3.2 gigawatts (GW). This includes 267 MW for the company's utility-scale solar power projects. Module shipments increased 42% on a year-over-year basis.

Gross margin was 17.9% in the quarter compared with 27% in the year-ago quarter.

Total operating expenses were $151.2 million, up 37.7% year over year. The increase in operating costs in the reported quarter was due to higher research and development expenses, general and administrative expenses, and selling expenses.

Interest expenses were $14.6 million, down from $19 million recorded in the year-ago period.

Canadian Solar Inc. Price, Consensus and EPS Surprise

Financial Update

As of Mar 31, 2021, cash and cash equivalents totaled $981.2 million, down from $1,178.8 million on Dec 31, 2020.

Long-term borrowings as of Mar 31, 2021, were $467.2 million, up from $446.1 million on Dec 31, 2020.

Guidance

For the second quarter of 2021, the company expects total module shipments of 3.5-3.7 GW, including approximately 80 MW of module shipments to its own projects. Total revenues are expected in the range of $1.4-$1.5 billion. Gross margin is expected between 9.5% and 10.5%.

The Zacks Consensus Estimate for the company’s second-quarter revenues is pegged at $1.44 billion, lower than the midpoint of its guided range.

For 2021, Canadian Solar reiterates total module shipments in the range of 18-20 GW, while revenues are expected in a band of $5.6-$6.0 billion.

The Zacks Consensus Estimate for the company’s 2021 revenues is pegged at $5.83 billion, higher than the midpoint of its 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.

Recent Solar Releases

Enphase Energy, Inc. (ENPH - Free Report) reported first-quarter 2021 adjusted earnings of 56 cents per share, which surpassed the Zacks Consensus Estimate of 41 cents by 36.6%.

First Solar Inc. (FSLR - Free Report) reported first-quarter 2021 adjusted earnings of $1.96 per share, which surpassed the Zacks Consensus Estimate of $1.00 by 96%.

SolarEdge Technologies, Inc. (SEDG - Free Report) reported first-quarter 2021 adjusted earnings of 98 cents per share, which missed the Zacks Consensus Estimate of $1.01 by 3%.

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