Canadian Solar misses on module shipments, beats on revenue and gross margin

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Major PV energy provider (PVEP) Canadian Solar reported module shipments 100MW below the bottom-end of guidance for the second quarter of 2015. However, revenue and gross margin exceeded prior guidance. 

Canadian Solar reported second quarter revenue of US$636.7 million, compared to US$860.9 million in the first quarter of 2015, yet exceed second quarter guidance in the range of US$570 million to US$620 million.

Gross margin was 15.2%, compared to 17.8% in the first quarter of 2015 and second quarter guidance in the range of 13.0% to 15.0%, exceeding the high-end guidance. 

Gross profit for the second quarter of 2015 was US$96.5 million, compared to US$153.0 million in the first quarter of 2015 and US$118.2 million in the second quarter of 2014.  

Total PV module shipments were 850MW, of which 809MW were recognized in revenue, compared to 1.03GW recognized in revenue in the first quarter of 2015. 

However, second quarter shipment guidance had been in the range 950MW to 1,000MW.
The shortfall in guidance was primarily due to a major shortfall in expected shipments to its own downstream project business in the quarter. 

Canadian Solar noted that PV module shipments recognized in revenue in the second quarter, included 90MW used in its total solutions business, yet had guided 165MW of shipments to its utility-scale solar projects that would not be recognized in second quarter 2015 revenue.

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar, remarked:  “Revenue for the second quarter was above the high-end of our guidance reflecting stable pricing and continued strong demand in our key markets worldwide.  With our late-stage, utility-scale solar project pipeline totaling 2.4GW, we continue to gain momentum, attracting leading financial partners to support our development efforts in Canada, the U.S., the U.K. and Japan.”  

Canadian Solar said it expected total module shipments in the third quarter of 2015 to be in the range of approximately 970MW to 1,020MW, including approximately 70MW of shipments to its utility-scale solar projects that will not be recognized in third quarter 2015 revenue. 

Total revenue for the third quarter is expected to be in the range of US$570 million to US$620 million, with gross margin expected to be between 12% and 14%, negatively impacted by US import duties as US shipments are expected to increase significantly in the quarter.

The company reiterated total module shipments in 2015 to be in the range of approximately 4.0GW to 4.3GW, including 3,300MW to 3,500MW of third-party module sales, 235 MW to 275MW of project and EPC sales, and 460MW to 490MW of shipments to projects which will be held on the balance sheet pending the potential launch of a YieldCo. 

Canadian Solar noted that total revenue for the full was expected to be in the range of US$2.8 billion to us$3.0 billion.  However, revenue would have been over US$1.0 billion higher if it had not planned to retain projects on its balance sheet ahead of launching a yieldco. 

“We continue to plan the launch of our renewable energy Yield Co with high quality assets in OECD countries. Meanwhile, the quality of our project portfolio also allows us to make a decent developer's margin even if we decide to sell these projects to third-party customers. Our strong track record gives us a competitive advantage and has enabled us to secure project level financing on favorable terms. While we continue to be positive on the growth in the U.S. in both module sales and downstream energy business, we are also pleased with our progress in Asia, where demand continues to grow as the market further matures.  Our pipeline of projects already under development in China and Japan stands at 338MWp and 617MWp, respectively. These are just a few of the growth markets we are addressing,” added Dr. Qu.

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