UPDATE: Canadian Solar (CSIQ) Tops Q4 EPS by 60c, Q1 Revenue Guidance Misses
Canadian Solar (NASDAQ: CSIQ) reported Q4 EPS of $1.61, $0.60 better than the analyst estimate of $1.01. Revenue for the quarter came in at $901 million versus the consensus estimate of $872.02 million.
GUIDANCE:
- Canadian Solar sees Q1 2019 revenue of $450-480 million, versus the consensus of $875.41 million.
Canadian Solar sees 2019 revenue of $3.5-3.8 billion, versus the consensus of $3.94 million.
Business Outlook
The Company's business outlook is based on management's views and estimates with respect to market conditions, production capacity, the current order book and the global economic environment. This outlook is subject to uncertainty on final customer demand, solar project construction and sale schedules. Management's views and estimates are subject to change without notice.
For the first quarter of 2019, the Company expects total solar module shipments to be in the range of approximately 1.3 GW to 1.4 GW, including approximately 50 MW of shipments to the Company's utility-scale solar power projects that may not be recognized as revenue in first quarter 2019. Total revenue for the first quarter of 2019 is expected to be in the range of $450 million to $480 million. Gross margin for the first quarter is expected to be between 16% and 18%. The Company expects the net profit for the first quarter of 2019 to be low or negative, primarily due to typical lower production and sales volume during the Chinese New Year holiday, IT upgrade, a lower module ASP, decreased sales of solar power projects compared to previous quarters, and an expected foreign exchange loss due to the appreciation of the Chinese RMB against the U.S. dollar.
For the full year 2019, the Company expects total module shipments to be in the range of approximately 7.4 GW to 7.8 GW. Total revenue for the full year 2019 is expected to be in the range of $3.5 billion to $3.8 billion. The full year revenue guidance reflects the impact of an expected lower module ASP and lower revenue from solar project sales. While the profit in subsequent quarters will likely recover from the first quarter of 2019 level, as module and project sales increase, the Company currently expects its net profit for 2019 to be lower than 2018.
Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar commented: "We had an exceptional year in 2018, with close to 140% growth of net profit from the 2017 level. This clearly demonstrated our global leadership position, the winning model of our solar project business, and the benefits of our manufacturing business strategy. As we discussed previously, the acceleration of certain high profit project sales also contributed to our success in 2018. This acceleration, however, will result in a reduction in solar project sale revenue and profit in 2019. And while we have a strong 2.9 GWp late-stage solar project pipeline, due to the typical project development cycle, we expect to realize sales for the majority of these late-stage projects in 2020 or later. This will likely create a temporary pullback in 2019 compared to 2018. We also expect lower profit from our module manufacturing business, partly due to higher costs caused by the appreciation of the Chinese RMB against the U.S. dollar and Euro over the past few months. Such cost increases would normally be offset by an adjustment of module ASP or by the cost reduction through technology improvements but that process takes time."
Dr. Shawn Qu continued, "Overall, while we expect 2019 financial results to be lower than 2018 due to the timing issues noted, this does not change our view on the long-term health, growth and profitability of our core business. We expect a rebound in project sales in 2020 and beyond given our robust project pipeline. Our focus on new solar module technologies, innovative products and premium channels will also help the Company maintain its competitive edge in its Module and Solar System business. We will continue to focus on delivering improved results and maximizing shareholder value."
For earnings history and earnings-related data on Canadian Solar (CSIQ) click here.