Canadian Solar Earnings: Fifth Straight Quarter of Shrinking Margins

Canadian Solar Inc.’s (NASDAQ:CSIQ) third quarter loss narrowed due mainly to shrinking costs. Canadian Solar designs, develops, manufactures, and sells solar cell and solar module products that convert sunlight into electricity.

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Canadian Solar Inc. Earnings Cheat Sheet

Results: Loss narrowed to $43.7 million (loss of $1.01 per diluted share) from $43.9 million (loss of $1.02 per share) in the same quarter a year earlier.

Revenue: Fell 34.8% to $326 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Canadian Solar Inc. fell short of the mean analyst estimate of a loss of 58 cents per share. It fell short of the average revenue estimate of $361.5 million.

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 0.2 percentage point to 2.2% from the year-earlier quarter. Over that time, margins have contracted on average 6.2 percentage points per quarter on a year-over-year basis.

Revenue has fallen for the last three quarters in a row. In the second quarter, revenue declined 27.7% to $348.2 million while the figure fell 26.5% in the first quarter from the year earlier.

For two quarters in a row, the company has come in under analyst estimates. In the second quarter, it missed expectations by 27 cents with a loss of 57 cents versus a mean estimate of a loss of 30 cents per share.

Looking Forward: The outlook for the company’s next-quarter results are less favorable than they were a month ago. The average estimate for the fourth quarter has fallen to a loss of 20 cents per share from a loss of 11 cents a month ago. For the fiscal year, the average estimate has moved from a loss of $2.07 a share to a loss of $1.96 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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