Lackluster Canadian Solar Q3 & Revised Guidance Sends Shares Tumbling

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Canadian-based solar PV manufacturer Canadian Solar has reported a lackluster third quarter, joining its North American brethren in what has been a tough year for solar companies in the region, forcing the company to revised its full-year guidance downward, and seeing its shares tumble.

Canadian Solar published its third quarter earnings on Monday, with shipments and net revenue both down on the second quarter, and previous guidance. Total solar module shipments for the third quarter were 1,185 MW, of which 1,161 MW was recognized in revenue (the remaining 24 MW used in the company’s own downstream projects), compared to 1,290 MW recognized in Q2 revenue, and falling well short of third quarter guidance in the range of 1,200 MW and 1,300 MW. Net revenue was similarly down at only $657.3 million, compared to $805.9 million in the second quarter, and third quarter guidance in the range of $660 million to $710 million.

Net income attributable to Canadian Solar was $15.6 million, or $0.27 per diluted share, compared to $40.4 million, or $0.68 per diluted share, in the second quarter of 2016.

“Our solar module shipments and revenue came in at the low end of our guidance, due to the dislocation of the global solar market during the quarter and the quarter-end logistic disruption caused by the bankruptcy of Hanjin Shipping in September,” explained Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar — though arguably, shipments and module fell below the low end of company guidance.

Looking forward, the company guidance estimated solar module shipments for the fourth quarter to be in the range of 1.4 GW to 1.5 GW, including approximately 30 MW for the company’s own downstream projects. Total revenue is expected to be in the range of $600 million to $750 million.

There are a number of transactions up in the air at the moment, with solar plant sales estimated at approximately $500 million set for either the fourth quarter of 2016 or the first quarter of 2017, with around $150 million recognized as revenue. Canadian Solar is also overbooked for the fourth quarter and fully booked for Q1’17, which means the company has had to start using third-party solar modules for some of its own projects.

All in all, Canadian Solar has had to revise its guidance for total module shipments down to in the range of 5.073 GW to 5.173 GW, compared to previous guidance of between 5.4 GW to 5.5 GW. Revenue is also expected to be down for the full-year 2016, down to $2.78 billion to $2.94 billion, compared to $3.0 billion to $3.2 billion.

“We remain confident in our long-term outlook and in our proven ability to navigate through disruptive, lower-visibility market environments,” concluded Dr. Qu. “Canadian Solar has always emerged in a stronger position from these periods of market volatility. We will continue to invest in advanced technologies that will deliver even higher module efficiency.”

Nevertheless, despite assurances from the company, Canadian Solar shares have dropped 8% over the two subsequent days following the company’s earnings report, following a year-long trend for the North American solar industry.

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Joshua S Hill

I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (, and can be found writing articles for a variety of other sites. Check me out at for more.

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