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Canadian Solar (CSIQ) Q2 Earnings & Sales Lag Estimates

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Canadian Solar Inc. (CSIQ - Free Report) reported second-quarter 2018 earnings of 26 cents per share, missing the Zacks Consensus Estimate of 33 cents by 21.2%. The company reported earnings of 63 cents per share in the year-ago quarter.

Total Revenues

Solar cell manufacturer Canadian Solar posted total revenues of $650.6 million in the quarter, which also missed the Zacks Consensus Estimate of $715 million by 9%. Further, the top line was down 6% from $692.3 million reported in second-quarter 2017.

Operational Update

Solar module shipments in the quarter totaled 1,700 megawatts (MW), up 23.7% from the first quarter’s shipment of 1,374 MW. The figure however exceeded management’s guided range of 1.50-1.60 gigawatt (GW).

Gross profit was $159.4 million, down 5% from the year-ago level of $167.8 million. Gross margin was 24.5% in the quarter (excluding the AD/CVD reversal benefits) compared with 24.2% in the prior-year quarter.

Total operating expenses were $105.5 million, up 25.5% year over year. Selling expenses totaled $40.3 million, up 2.4% year over year. General and administrative expenses were $56.4 million, up 6.6% year over year. Research and development expenses were $9.1 million compared with $7.3 million a year ago.

Interest expenses were $26.6 million, marginally down from $26.7 million recorded a year ago.

Financial Update

As of Jun 30, 2018, cash and cash equivalents were $452.5 million, down from $561.7 million as of Dec 31, 2017.

Long-term debt as of Jun 30, 2018 was $221.3 million, down from $404.3 million as of Dec 31, 2017.

Canadian Solar Inc. Price, Consensus and EPS Surprise

 

Canadian Solar Inc. Price, Consensus and EPS Surprise | Canadian Solar Inc. Quote

Business Developments

During the reported quarter, the company’s wholly-owned subsidiary, Recurrent Energy closed on debt financing and tax equity investment commitments for its 102 megawatt-peak (MWp) NC 102 solar power project, located in North Carolina. Prudential Capital Group will provide a $106.7 million debt facility for the project including a tax equity bridge loan, term loan and revolving loan.

Moreover, it announced the COD of its 56.3 MWp Yamaguchi Shin Mine solar power project in Japan.

Guidance

For third-quarter 2018, Canadian Solar expects shipments in the range of 1.50-1.60 GW including approximately 210 MW of shipments to the company's utility-scale solar power projects. Total revenues are projected in the range of $790-$840 million along with gross margin in the 20-23% range.

Zacks Rank

Canadian Solar carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Utility Releases

Xcel Energy (XEL - Free Report) recorded second-quarter 2018 operating earnings of 52 cents per share, beating the Zacks Consensus Estimate of 47 cents by 10.6%. Also, the bottom line was 15.6% higher than the year-ago quarter’s tally.

DTE Energy (DTE - Free Report) reported second-quarter 2018 operating earnings per share of $1.36, which outpaced the Zacks Consensus Estimate of $1.11 by 22.5%.

American Electric Power (AEP - Free Report) reported second-quarter 2018 adjusted earnings per share of $1.01, beating the Zacks Consensus Estimate of 88 cents by 14.8%.

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