Canadian Solar (CSIQ) Q2 Earnings & Revenues Beat Estimates

Canadian Solar Inc. CSIQ reported adjusted second-quarter 2020 earnings of 9 cents per share, which surpassed the Zacks Consensus Estimate of break-even earnings. In the year-ago quarter, the company had reported adjusted earnings of 77 cents per share.

GAAP earnings came in at 34 cents per share in the quarter under review compared with $1.04 in second-quarter 2019.

Total Revenues

Canadian Solar’s total revenues of $695.8 million outpaced the Zacks Consensus Estimate of $661 million by 5.2%. Net revenues of $695.8 million exceeded the guidance of $630-$680 million.

The top line, however, plunged 32.9% from $1,036.3 million reported in second-quarter 2019. The year-over-year decline can be attributed to lower average module selling prices and limited project sales in the reported quarter.

Operational Update

Solar module shipments in the quarter totaled 2,905 megawatts (MW), up from 2,214 MW in the first quarter of 2020 and 2,143 MW in the second quarter of 2019. Growth in shipments was driven by moderate market share gains.

Gross profit amounted to $147 million, down 19.7% from the year-ago quarter’s $183 million. Gross margin was 18.2% in the quarter (excluding the AD and CVD benefits). Including the benefits, gross margin was 21.2% compared with 17.6% in the second quarter of 2019.

Total operating expenses were $101.7 million, down 16.5% year over year. Selling expenses summed $53.5 million, up 17.9% year over year. General and administrative expenses summed $46.4 million, down 29.5% year over year. Research and development expenses were $10.9 million compared with $12.1 million in the year-ago period.

Income tax expenses in the second quarter of 2020 were $9 million compared with the income tax expenses of $14 million in the second quarter of 2019.

Interest expenses were $17 million, down from $20.7 million recorded in the year-ago period.

Canadian Solar Inc. Price, Consensus and EPS Surprise

Canadian Solar Inc. price-consensus-eps-surprise-chart | Canadian Solar Inc. Quote

Financial Update

As of Jun 30, 2020, cash and cash equivalents totaled $578.8 million, down from $668.8 million as of Dec 31, 2019.

Long-term debt as of Jun 30, 2020, was $580.4 million, down from $619.5 million as of Dec 31, 2019.

Guidance

For third-quarter 2020, Canadian Solar expects shipments of 2.9-3.1 GW. This guidance includes approximately 300 MW of shipments to its utility-scale solar power projects that may not be recognized as revenues. Total revenues are projected within $840-$890 million, while gross margin is expected in the band of 14-16%.

The Zacks Consensus Estimate for the company’s third-quarter revenues is pegged at $816.3 million, lower than the company’s guided range.

For 2020, Canadian Solar still expects total module shipments in the range of 11-12 GW.

Zacks Rank

Canadian Solar currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Recent Solar Releases

Enphase Energy, Inc. ENPH reported second-quarter 2020 adjusted earnings of 17 cents per share, which surpassed the Zacks Consensus Estimate of 14 cents by 21.4%.

SolarEdge Technologies, Inc. SEDG reported second-quarter 2020 adjusted earnings of 97 cents per share, which surpassed the Zacks Consensus Estimate of 69 cents by 40.6%.

SunPower Corp. SPWR incurred an adjusted loss of 22 cents per share in second-quarter 2020, narrower than the Zacks Consensus Estimate of a loss of 42 cents.

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