Canadian Solar Inc.
CSIQ
reported third-quarter 2020 earnings of 15 cents per share in contrast to the Zacks Consensus Estimate of a loss of 4 cents. However, the reported earnings figure deteriorated 84.4% from the year-ago quarter’s earnings of 96 cents per share.
The year-over-year deterioration can be attributed to higher cost of revenues that the company incurred in the reported quarter.
Total Revenues
Canadian Solar’s total revenues of $914.4 million outpaced the Zacks Consensus Estimate of $861 million by 6.3%. Net revenues in the reported quarter also comfortably exceeded the company’s guidance of $840-$860 million.
Moreover, the top line improved 20.3% from $759.9 million reported in third-quarter 2019. The year-over-year improvement is driven by higher module shipments and project sales.
Canadian Solar Inc. Price, Consensus and EPS Surprise
Canadian Solar Inc. price-consensus-eps-surprise-chart
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Canadian Solar Inc. Quote
Operational Update
Solar module shipments in the quarter totaled 3,169 megawatts (MW), up 33% on a year over year basis and grew 9% from 2,905 MW in the second quarter of 2020. Growth in shipments was driven by strong global demand growth. Shipments also exceeded the guidance range of 2.9-3.1 MW.
Gross profit amounted to $178.4 million, down 12.3% from the year-ago quarter’s $198.9 million. Gross margin was 19.5% in the quarter, indicating a contraction of 670 basis points from the third quarter of 2019. However, it came above the guidance range of 14-16%.
Total operating expenses were $119 million, up 0.5% year over year. Selling expenses totaled $54 million, up 15% year over year. General and administrative expenses were $56.2 million, down 8.6% year over year.
Research and development expenses were $14.1 million, up 22.3% from the year-ago period.
Income tax expenses in the third quarter of 2020 were $24 million compared with $10 million in the third quarter of 2019.
Interest expenses were $17.9 million, down from $19.2 million recorded in the year-ago period.
Financial Update
As of Sep 30, 2020, cash and cash equivalents totaled $1,103 million, up from $668.8 million as of Dec 31, 2019.
Long-term debt as of Sep 30, 2020 was $623.6 million, up from $619.5 million as of Dec 31, 2019.
Guidance
For fourth-quarter 2020, Canadian Solar expects shipments of 2.9-3.0 GW. This guidance includes approximately 350 MW of shipments to its utility-scale solar power projects that may not be recognized as revenues. Total revenues are projected within $980-$1,015 million, while gross margin is expected in the band of 8-10%.
The Zacks Consensus Estimate for the company’s third-quarter revenues is pegged at $1,140 million, higher than the guided range.
For 2020, Canadian Solar now expects total module shipments in the range of 11.2-11.3 GW, compared with the prior guidance 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
.
Some Q3 Solar Releases
Enphase Energy
ENPH
reported third-quarter 2020 adjusted earnings of 30 cents per share, which surpassed the Zacks Consensus Estimate of 24 cents by 25%.
First Solar
FSLR
reported third-quarter 2020 adjusted earnings of $1.45 per share, which surpassed the Zacks Consensus Estimate of 60 cents by 141.7%.
SunPower
SPWR
incurred an adjusted loss of 4 cents per share in third-quarter 2020, narrower than the Zacks Consensus Estimate of a loss of 5 cents.
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