Canadian Solar Q3 earnings fall short of estimates, shares dip

Canadian Solar (NASDAQ:) Inc. reported a significant earnings shortfall for the third quarter, with earnings of 32 cents per share, missing estimates by a considerable margin. This result represented a sharp decline of 71.4% compared to the same period last year. The company’s total revenues also fell short at $1.846 billion, which was 7.4% below the consensus estimate and marked a decrease of 4% from the third quarter of 2022.

Despite an increase in solar module shipments by 39% year-over-year to 8.3 gigawatts (GW), including 82 megawatts (MW) from utility-scale solar power projects, the company’s financial performance did not meet expectations. The gross margin was reported at 16.7% while operating expenses saw a reduction of 17.9% from the previous year, totaling $225 million.

Canadian Solar experienced a rise in depreciation and amortization charges, which went up to $76 million from $56 million last year. As of September 30, 2023, the company’s cash and cash equivalents stood at $1.921 billion, an increase from $981.4 million at the end of 2022. However, long-term borrowings also rose to $1.071 billion from $813.4 million over the same period.

Looking ahead to the fourth quarter and full-year projections for 2023, Canadian Solar expects total module shipments to be between 7.6 GW and 8.1 GW for Q4 and between 42 GW and 47 GW for the full year. The company anticipates total revenues for Q4 to range between $1.6 billion and $1.8 billion, which is lower than the Zacks Consensus Estimate of $2.58 billion for Q4 sales. The projected gross margin is expected to be between 14% and 16%, with battery storage shipments forecasted to be between 1.4 gigawatt-hours (GWh) and 1.5 GWh for Q4, and between 6 GWh and 6.5 GWh for the entire year.

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