Why Canadian Solar Is Higher Despite Mixed Q4 Results

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Canadian Solar Inc. (NASDAQ: CSIQ) released its fiscal fourth-quarter financial results before the markets opened on Monday. The company said that it had $1.01 in earnings per share (EPS) on $1.11 billion in revenue, compared with consensus estimates from Thomson Reuters that called for $0.96 in EPS on revenue of $1.14 billion. The same period of last year reportedly had EPS of $0.24 and $668.43 million in revenue.

Total solar module shipments for the quarter were 1,831 megawatts (MW), compared to 1,870 MW in the third quarter of 2017, and fourth quarter guidance in the range of 1,720 MW to 1,820 MW.

Net revenue from the total solutions business as a percentage of total net revenue was 36.4%, up from 21.6% sequentially.

During the quarter, Canadian Solar completed the sale of 13 solar power plants totaling 72.7 MWp in Japan to Canadian Solar Infrastructure Fund for approximately $270 million. The firm’s portfolio of solar power plants in operation was approximately 1.2 GWp at the end of the period.

Looking ahead to the first quarter, the company expects total solar module shipments to be in the range of approximately 1.30 GW to 1.35 GW, with revenues in the range of $1.37 billion to $1.40 billion. The consensus estimates call for $0.20 in EPS on $1.13 billion in revenue for the coming quarter.

On the books, Canadian Solar cash, cash equivalents and restricted cash balances at the end of the quarter totaled $1.19 billion, compared to $1.15 billion at the end of the third quarter of 2017.

Dr. Shawn Qu, board chair and chief executive of Canadian Solar, commented:

Our record-high solar module shipments for the full year 2017 were driven by strong demand from China, India, Europe and the United States. We are also pleased with the impressive project sale momentum we achieved, led by demand for our highly-attractive project assets, which we have carefully built up over the past few years in key markets worldwide. We remain focused on securing a competitive return on all of our project investments; and redeploying the capital received into new project opportunities, while also paying down our debt as we continue to build shareholder value.

Shares of Canadian Solar up 6.8% to $16.55 early Monday, with a consensus analyst price target of $19.84 and a 52-week range of $10.86 to $19.09.

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