Canadian Solar (NASDAQ: CSIQ) reported Q1 EPS of $0.36, $0.05 worse than the analyst estimate of $0.41. Revenue for the quarter came in at $1.09 billion versus the consensus estimate of $1.05 billion.

Highlights

• Solar module shipments of 3.1 GW in the first quarter of 2021, compared to guidance of 3.0 GW to 3.2 GW.
• Revenue increased 32% year-over-year ("yoy") to $1.1 billion, compared to guidance of $1.0 billion to $1.1 billion.
• Gross margin of 17.9%, compared to guidance range of 16% to 18%.
• Net income attributable to Canadian Solar of $23 million, or $0.36 per diluted share.
• 1.2 GWh of battery storage projects under construction.
• Total battery storage project development pipeline nearly doubled to 17 GWh.
• Strategic partnership and investment in Habitat Energy to strengthen battery storage capabilities.
• Carve-out IPO of CSI Solar subsidiary remains on track.

Dr. Shawn Qu, Chairman and CEO, commented, "First quarter 2021 revenue and gross margin came in at the high-end of our guidance, as our team remained focused on achieving financial and business improvements despite the challenging market conditions. We nearly doubled our total storage project development pipeline and expect this positive momentum to continue, which should greatly enhance the value of our development pipeline. We further strengthened our competitive position with our recent strategic partnership with Habitat Energy, which will leverage our global scale and platform, while helping us improve the software capabilities of our battery storage projects. As always, Canadian Solar is at the forefront of developing and commercializing the energy innovations that matter to our customers. The latest example is the Q1 production of our first N-type heterojunction (HJT) solar cell from our newest state-of-the-art 250 MW pilot line. Our teams are rapidly improving the cell conversion efficiency of these new cells, and we expect to start delivering our first cutting-edge HJT solar modules in the third quarter this year.

"Separately, the carve-out IPO of CSI Solar remains on track. We officially submitted the listing application materials to the securities regulatory authorities in China, which are now under review per usual procedures."

Ismael Guerrero, Corporate VP and President of Canadian Solar's Global Energy subsidiary, said, "In the first quarter of 2021, we delivered approximately 500 MWp of project sales, including 61 MWp in Japan, which were acquired by Canadian Solar Infrastructure Fund, the largest listed infrastructure fund on the Tokyo Stock Exchange. We also continued to grow our solar and storage project pipelines totaling 21 GW and 17 GWh at the end of March, respectively, building one of the largest solar and storage project pipelines in the world. We are excited to report that we have established a new Brazilian Participation Fund for Infrastructure Projects (FIP-IE) and are currently executing on approximately 2 GWp of contracted solar projects in Brazil. Last month, we set up the structure of a Real Estate Investment Fund (REIF) in Italy, which will be a private investment vehicle for our Italian projects currently under development. We will continue to work on investment vehicles in our Global Energy business as we work to build and monetize value for the Company and shareholders."

Yan Zhuang, President of Canadian Solar's CSI Solar subsidiary, said, "The first quarter was challenging, as expected, with cost inflation driven by continued higher raw material and transportation costs, and unfavorable foreign exchange fluctuations. For instance, the price of polysilicon has tripled over the past twelve months. We were able to partially mitigate the impact by raising our module prices, which saw a near double digit percentage increase relative to the previous quarter, and prioritizing margins ahead of shipment volumes. Underlying demand for solar energy remains strong driven by ambitious public and private sector targets, yet we are seeing increasing price elasticity of demand and the prospect that certain utility scale projects may be delayed. Meanwhile, we continue to focus on developing our technology differentiation, enhancing our product offering through high value-add system solutions, and working closely with our customers and partners."

Dr. Huifeng Chang, Senior VP and CFO, added, "In the first quarter of 2021, we achieved $1.1 billion in revenue, 17.9% gross margin and $23 million net income, executing to the high end of guidance. Net income increased to $0.36 per diluted share from $0.11 per diluted share in the fourth quarter of 2020, even with higher taxes and unfavorable foreign exchange conditions. We ended the first quarter with $1.5 billion in cash, allowing us to selectively build strategic stock of key materials in support of higher customer demand and lessen the impact of increasing raw material costs. We remain disciplined and will continue to invest in long-term growth opportunities, including our expanding battery storage pipeline."

For earnings history and earnings-related data on Canadian Solar (CSIQ) click here.