Canadian Solar’s Q2 results beat market estimates

Canadian Solar Inc. (NASDAQ: CSIQ) beat market expectations for revenue and earnings in the second quarter of 2019. Analysts had forecast earnings of $0.30 per share on revenue of $990 million. Shares soared over 11% in premarket hours on Thursday.

Net revenue was $1.03 billion compared to $650 million in the same period last year. Net revenues jumped 114% sequentially helped by higher solar module shipments and higher revenue from the sale of solar power plants.

GAAP net income attributable to Canadian Solar was $62.7 million, or $1.04 per share, compared to $15.5 million, or $0.26 per share, in the prior-year period. Adjusted net income attributable to Canadian Solar was $46.4 million, or $0.77 per share.

Total solar module shipments were 2,143 MW, including 65 MW shipped to the company’s utility-scale solar power projects. Module shipments recognized in revenue during the quarter totaled 2,376 MW, compared to 1,454 MW in the prior-year period.

Inventories at the end of the quarter were $337.8 million. Inventory turnover in the quarter was 40 days.

As of July 31, 2019, the company’s late-stage, utility-scale solar project pipeline, including those in construction, totaled approx. 3.6 GWp, with 1,565 MWp in the US, 508.2 MWp in Brazil, 368 MWp in Mexico, 311.8 MWp in Japan, 385 MWp in China and additional 465.2 MWp in total in Australia, Canada, Israel, Taiwan, the Philippines, Malaysia, Italy and South Korea.  

For the third quarter of 2019, Canadian Solar expects total solar module shipments to be in the range of 2.2 GW to 2.3 GW, including approx. 160 MW of shipments to the company’s utility-scale solar power projects that may not be recognized as revenue in the third quarter. 

Total revenue for the third quarter is expected to be $780 million to $810 million and gross margin is expected to be 24-26%. This guidance excludes the potential sales of a project that may be completed in the third quarter. If the transaction is closed in time, total revenue for the third quarter is expected to be $970 million to $1 billion and gross margin is expected to be 27-29%.

For the full year of 2019, the company raised its guidance for total module shipments to the range of approx. 8.4 GW to 8.5 GW from the previous guidance of 7.4 GW to 7.8 GW. Total revenue for 2019 is expected to be $3.5 billion to $3.8 billion.

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