We would like to highlight Canadian Solar Inc. (NASDAQ: CSIQ). The company is a vertically integrated manufacturer of solar cell, solar module and custom-designed solar application products serving customers worldwide. CSI is incorporated in Canada and conducts its businesses worldwide and manufacturing operations in China. Backed by years of experience and knowledge in the solar power market and the silicon industry, CSI has become a major global provider of solar power products for a wide range of applications.
In the company’s news today,
Canadian Solar Inc. (CSIQ) reported strong second quarter financial results. Revenues of $212.6 million rose 24% sequentially from $171.2 million in the first quarter. Sales year over year increased 252% from $60.4 million. Net income was $10.5 million, or 36 cents per share, compares to a net loss of $2.9 million, or 11 cents per share, in the Q2 2007. Net income fell sequentially from $19.0 million, or 61 cents per share. Non-GAAP net income for the quarter, excluding non-cash compensation expenses and one-time charges, was $23.0 million, or 78 cents per share. This represents a sequential increase of 8.5% from $21.2 million, or 65 cents per share, in the first quarter. Analysts surveyed expected the company to report earnings of 47 cents per share on revenues of $206.8 million.
Dr. Shawn Qu, Chairman and CEO of CSI, commented: “It has been a very solid and eventful quarter for the Company, with progress on all fronts. This marks our fifth consecutive quarter of sequential quarter-to-quarter top line growth. We have also successfully advanced our capital projects, both for the ingot and wafer plant, and the Phase II solar cell facility, and we expect significant increases in our H2 of 2008 deliveries compared with H1 of 2008. Further vertical integration on the ingot and wafer side is now well in progress with the Company having produced its first wafers on August 2nd. This will provide additional efficiencies in manufacturing the e-Module products and allow us to employ proprietary methods and patented technologies in the production of UMG ingots and wafers. On the supply side, we have entered into two new long-term contracts with LDK and New Solar Power, which will improve our supply situation in 2009.”
The company raised its revenue guidance for fiscal 2008 to $850 - $970 million from previous guidance of $750 - $870 million. Arthur Chien, CFO of CSI, noted: ”Revenues for Q2 were $212.6 million, which is more than 10% above our prior guidance of $185 - $190 million, while our gross margin of 15.8% (excluding silicon material sales) remained above our target gross margin range of 13% - 15%. Our GAAP income per diluted share included a one-time non-cash charge of $10.2 million associated with the early conversion of our convertible notes, which will help CSI save future interest payments. Our successful secondary offering in July has positioned us in a stronger foothold that would empower us to carry on in our path of rapid growth well into 2009 with elevated financial flexibility. We have adequate resources for all of our planned H2 2008 capital expenditures and working capital purposes. Looking ahead, we expect our margins to remain steady and within our target range. I am confident that our quarterly revenue will continue to grow in the second half of 2008.”
Shares of CSIQ gained 14.9% yesterday to close at $30.91 on the strength of LDK’s earnings announcement on Monday, and in anticipation of today’s press release. Shares of CSIQ have traded in a 52-week range of $6.50 - $51.80. Because earnings fell shy of estimates on a GAAP basis, there is some early confusion about how to interpret Q2 results, despite increasing sequential earnings on a non-GAAP basis and raised guidance.
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Forward-Looking Statement:
This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.
