Saturday, November 22, 2008

Canadian Solar Q3 income surges; cuts FY08 revenue outlook, expects net loss in Q4

11/21/2008

(RTTNews) - Friday, solar cell manufacturer Canadian Solar, Inc. reported an increase in third-quarter net income, driven by a surge in revenues, with growth across all geographies. However, cautious of the uncertain economic environment, the company lowered its full-year revenue outlook.

The Markham, Canada-based company posted net income of $11.07 million or $0.31 per share, compared to net income of $522 thousands or $0.02 per share in the same period of last year.

Excluding stock based compensation, adjusted net income declined to $14.60 million or $0.41 per share from $23.05 million or $0.78 per share in the year-ago period.

On average, eight analysts polled by First Call/Thomson Financial expected the company to earn $0.54 per share. Analysts' estimates typically exclude special items.

Net revenues for the quarter rose 160% to $252.4 million from $97.4 million in the previous year, and came above the analysts' consensus of $248.00 million.

In the sequentially preceding quarter, the company reported net income of $10.5 million, or $0.36 per share, on revenues of $212.6 million.

Geographically, revenues in Europe rose to $222.4 million from $95.5 million last year. Asian revenues grew to $16.5 million from $4.1 million in the previous year, while the company generated $13.5 million as revenues in America, compared to nil revenue in the preceding year.

Total operating expenses increased to $13.35 million from $7.03 million in the same quarter a year ago. Shawn Qu, the company's chairman and chief executive officer, said the results reflected the company's conservative approach to the business and its balanced financial management. He added that the successful production ramp up of the low-cost e-Modules products, helped in maintaining the gross margin in the quarter.

Further, in July the company took measures to hedge against currency risk, which are believed to offset the impact of Euro against US Dollar foreign exchange fluctuations in the fourth quarter and the first quarter of 2009.

For the first nine months, the company reported net income of $40.6 million or $1.30 per share, compared to net loss of $6.2 million or $0.23 per share in the comparable period of last year.

Year-to-date revenues rose to $636.18 million from $175.34 million in the year-ago period.

Looking ahead, for full year 2008, the company lowered its revenue guidance to $650 million - $750 million, based on the uncertainty of project and customers' financing, and softening solar demand in Europe and USA at the year-end. Earlier, the company had issued full-year revenue guidance of $850 million - $970 million. Analysts have a consensus revenue estimate of $901.87 million for the full year.

The company expects fourth-quarter shipments in a range of 20 megawatts to 25 megawatts, which would result in revenues of approximately $70 million to $85 million. Further, the company expects to report a loss in the fourth quarter, reflecting the present market environment, which might necessitate adjustments to the balance sheet.

Analysts are expecting earnings of $0.39 per share on revenues of $270.06 million for the fourth quarter.

Shares of CSIQ closed Thursday's regular trading session at $3.78. In the past 52 weeks, the stock has been trading in the range of $3.53 to $51.80.

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