Canadian Solar Inc. (NASDAQ: CSIQ) reported second-quarter 2013 results before markets opened this morning. The Chinese solar panel maker posted a diluted earnings per share (EPS) loss of $0.29 on revenue of $380.38 million. In the same period a year ago, Canadian Solar reported a net loss of $0.59 per share on revenue of $348.22 million. Second-quarter results also compare to the Thomson Reuters consensus estimates for a net loss of $0.20 per share and $419.83 million in revenue.

Sequentially, revenues improved more than 44% and module shipments were up 34%. Shipments to Japan were up 95% sequentially and accounted for nearly 36% of the company’s second quarter shipments.

Second-quarter gross margin rose from 9.7% in the first quarter to 12.8%. The company said that third-quarter gross margins will drop back to between 9% and 11%.

For the third quarter Canadian Solar expects module shipments in the range of 410 to 430 megawatts. For the full-year shipments are forecast at 1,600 to 1,800 megawatts. Japan is expected to take 35% to 40% of third quarter shipments.

The company’s CEO said:

Clearly, the industry is emerging from a very challenging period, with improved pricing power and growing demand. As we move forward our strategic direction remains the same. We will maintain our focus on preserving our cost leadership while ensuring the high quality of our solar products and solutions. We will also continue to work hard to differentiate our business model, expand our customer base and global footprint.

Canadian Solar expects to sell three solar power projects in Ontario and to realize a gain of $60 million on each project once the transactions are complete.

In a related development, another Chinese solar maker, Trina Solar Ltd. (NYSE: TSL) announced this morning that it was raising second-quarter guidance. The company lifted shipment guidance from a range of 500 to 530 megawatts to a new range of 630 to 660 megawatts. Gross margins expectations have risen from the mid-single digits to a range 11% to 12%. Trina Solar is scheduled to report earnings after markets close on August 19.

Shipments are rising and margins are up at two of China’s larger solar makers. These are good signs for the solar PV industry that has just experienced two awful years.

Canadian Solar’s shares are down about 0.4% in premarket trading, at $14.31 in a 52-week range of $1.95 to $16.40. Thomson Reuters had a consensus analyst price target of around $19.75 before today’s results were announced. At the end of December, the consensus estimate for Canadian Solar’s stock was $5.30.

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