Canadian Solar Stock Tumbles Followed By a Weak 2QFY15 Earnings
The article takes a look at Canadian Solar Inc.’s quarterly results.
Canadian Solar Inc. declared its second quarter earnings result for fiscal year 2015 on Tuesday August 18 after the bell rings. The company reported unsatisfactory financial results. After the announcement of quarterly results, the company stock went down by around 19% and reached $19.95 as of 11:00 AM EDT. During the starting 90 minutes almost 8.19 million shares exchanged hands, which is approximately 4x more than the daily 30 day average volume of 2.05 million.
The second quarter results were largely behind the first quarter financial results of the company, while also falling behind the company’s own quarterly estimates. Canadian Solar reported a fall of 17% compared to its previous quarter in the shipment of solar modules reported at 850 Megawatts. The company was able to report earnings of 32 cents per share, which surpassed consensus expectations of 29 cents.
Net Income for the quarter came in at $17.9 million, compared to $55.8 million of N.I reported in the similar quarter last year. Sales for the quarter witnessed a drastic decline of around 26% compared to previous quarter, reported at $636.7 million. However, the revenue beat the company’s estimate of $570 to $620 million and consensus forecast of $596 million.
The Gross margin for the latest quarter was 15.2% declining by 2.6 ppts (percentage points) compared to first quarter, while the gross profit came in at $96.5 million, compared to $153 million reported in first quarter of fiscal year 2015.
Earlier few months, Canadian Solar announced that it might start a separate entity to function finished power plants. This plan is usually called as Yieldco, which leads to cut profit often, because the assets were hold by the company rather than selling them in the market.
The company restated its full-year revenue forecast of $2.8 to $3 billion, together with the 4.0 to 4.3 Gig watt of solar power guidance. The median revenue forecast of $2.9 billion is less than consensus forecast of $3.03 billion.
The Chief Executive Officer of Canadian Solar Inc., Shawn Qu, expects the company is constantly gaining momentum, while reaching different partners to support its development projects in United Kingdom, Japan, United States and Canada.
The quarter ended on June 30 was from extraordinary for the company, and its guidance on the upcoming quarter is not good, so the post earnings sell off in its stock was right.
CSIQ stock was down 0.96% at $20.20 during pre-market trading session today.
