Canadian Solar posts lower Q3 profits, cuts 2016 forecast

Solar panels. Author: John S. Quarterman. License: Creative Commons, Attribution 2.0 Generic.

Canadian Solar Inc (NASDAQ:CSIQ) today reported a third-quarter (Q3) net profit of USD 15.6 million (EUR 14.7m) and trimmed its revenue and shipments forecast for 2016.

The photovoltaics (PV) maker now expects full-year revenues of USD 2.78 billion-2.94 billion, which compares to the previous guidance for USD 3 billion-3.2 billion. The forecast excludes about USD 300 million expected from the sale of solar power assets. Canadian Solar’s total module shipments forecast has been cut to 5,073 MW-5,173 MW from 5,400 MW-5,500 MW previously.

"Our [Q3] 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,” said Shawn Qu, chairman and CEO. He added that Canadian Solar has effectively managed the supply chain and its own output to offset the macro impact of the fall in average selling prices. The company reported a better-than-forecast gross margin of 17.8%.

Results in USD million	Q3 2016	Q2 2016	Q3 2015
Net revenue	657.3	805.9	849.8
Module shipments (MW)	1,161	1,290	1,150
Gross margin (in %)	17.8	17.2	14.9
Operating profit	27	39.6	30.9
Foreign exchange gains	4.4	24.9	17.1
Net attributable profit	15.6	40.4	30.4
Diluted earnings per share (in USD)	0.27	0.68	0.53

Canadian Solar also continued to expand its downstream solar business in the period. Its late-stage solar project pipeline reached 2.0 GWp and it had 948 MWp of solar PV parks operational, with the USA and China being the top locations. For that division, the company’s plan is to continue developing and selling assets, thus strengthening its balance sheet, cutting market risk, and redeploying capital.

"We remain confident in our long-term outlook and in our proven ability to navigate through disruptive, lower-visibility market environments. Canadian Solar has always emerged in a stronger position from these periods of market volatility,” said the CEO.

(USD 1 = EUR 0.94)

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