Canadian Solar Beats Expectations In First Quarter, Shares Skyrocket

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Solar PV manufacturer Canadian Solar beat all expectations, its own and others, in the first quarter of 2016, sending its share prices skyrocketing.

In the company’s first quarter 2016 results, Canadian Solar reported impressive total solar module shipments and net revenue, and walked away with a healthy net income for the quarter. As a result, the company’s shares jumped 12% in one day’s trading.

Canadian Solar-2Total solar module shipments for the first quarter were 1,198 MW — a slight decrease on the fourth quarter, though the first quarter usually is. Q4’15 saw total solar module shipments of 1,398 MW, but Canadian Solar had only provided guidance that it would ship in the range of 1,085 MW to 1,135 MW.

Net revenue for the quarter was similarly impressive, down again on Q4’15, but in excess of its first quarter guidance — coming in at $721.4 million, down from $1,120.3 million in Q4’15, but up on guidance of between $645 million and $695 million.

Subsequently, Canadian Solar saw a net income of $22.6 million, or $0.39 per share.

“Our results for the first quarter came in above guidance, driven by robust demand in our solar module business,” said Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar.

Dr Qu continued, adding that the company’s first quarter results did not include the sale of any solar projects, but that it intends to sell some of its 438 MW worth of projects in operation, worth an estimated resale value of $950 million, sometime in the second half of 2016.

“Our steady, longer-term approach has positioned Canadian Solar for sustained success and has set Canadian Solar apart from competitors,” Dr Qu added. “We remain confident in our business model, outlook and in our ability to manage our profitable growth.”

Looking ahead to the second quarter, Canadian Solar expects total module shipments to be in the range of approximately 1,200 MW to 1,250 MW, which includes 30 MW to be shipped to the company’s own downstream projects. Total revenue for the second quarter is expected to be in the range of $710 million and $760 million, with a gross margin of between 15% to 17%.

While full year 2016 shipping guidance remains the same, set to be in the range of 5.4 GW to 5.5 GW, Canadian Solar is raising revenue guidance for the year based on expected sales, and is now expected to be in the range of $3.0 billion and $3.2 billion (up from $2.9 billion to $3.1 billion).

Canadian Solar is also expecting to expand its wafer, cell, and module capacities to 1.0 GW, 3.9 GW, and 6.43 GW respectively, by the end of the year. The company’s wafer manufacturing capacity at its Luoyang plant in the Henan Province is expected to reach 1.0 GW by the end of June, while the company’s cell manufacturing capacity at its Funing plant in the Jiangsu Province is expected to reach 1.o GW by July. A new 700 MW cell manufacturing plant to be located in South East Asia is expected to be commissioned in the second half of this year, while the company’s existing module manufacturing capacity is expected to reach 6.43 GW by the end of the year.

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Joshua S Hill

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