Canadian Solar Earnings: Here’s Why Investors are Buying Shares Now

Canadian Solar Inc. (NASDAQ:CSIQ) had a loss and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 24.29%.

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Canadian Solar Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased to $-0.1 in the quarter versus EPS of $-0.49 in the year-earlier quarter.

Revenue: Decreased 19.09% to $263.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Canadian Solar Inc. reported adjusted EPS loss of $0.1 per share. By that measure, the company beat the mean analyst estimate of $-0.78. It beat the average revenue estimate of $221 million.

Quoting Management: Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar, remarked: “We are pleased with our first quarter results and our progress in the execution of our strategy. Our shipments of 340 MW exceeded our initial guidance of 290 MW to 310 MW, while gross margin came in at the high-end of our guidance. During the quarter, we also continued the successful transformation of our business model from a leading module supplier into a leading solar power solutions company with a solid and growing utility-scale project pipeline in Canada, the U.S., China and Japan, as well as a profitable and growing residential solar system kits business in Japan. Our total solutions business represented 19.2% of our revenue in the first quarter, compared to 12.8% in the fourth quarter of 2012. We are also pleased with our results in Japan where our investment and market development efforts since 2009 are beginning to pay off. We have a differentiated position in this important growth market with a strong brand name as opposed to being a private label manufacturer like many of our competitors. We are well positioned in the high-margin and long-term sustainable residential rooftop kits business as well as the high-volume commercial project market. Our strong market position is also helping us to develop our own utility project pipeline, which we expect, will become a meaningful part of our business in the quarters ahead. Meanwhile we have maintained our strong position in the South East Asia market including India and Thailand.”

Key Stats (on next page)…

Revenue decreased 10.6% from $294.84 million in the previous quarter. EPS increased to $-0.1 in the quarter versus EPS of $-1.71 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a loss of $0.1 to a loss $0.4. For the current year, the average estimate has moved down from a profit of $0.96 to a loss of $0.64 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)