Canadian Solar, Inc. (NASDAQ: CSIQ) reported Q1 EPS of $0.07, $0.05 worse than the analyst estimate of $0.12. Revenue for the quarter came in at $466.3 million versus the consensus estimate of $431.98 million.

Solar module shipments were 500 MW, compared to 621 MW in the fourth quarter of 2013 and to first quarter guidance in the range of 470 MW to 490 MW.

Business Outlook

The Company's business outlook is based on management's current views and estimates with respect to operating and market conditions, its current order book, global and local financing environment as well as uncertainty relating to customer final demand and solar project construction schedule. Management's views and estimates are subject to change without notice.

For the second quarter of 2014, the Company expects module shipments to be in the range of approximately 600 MW to 630 MW. Total revenue for the second quarter of 2014 is expected to be in the range of $560 million to $590 million, with gross margin expected to be between 17% and 19%.

For full year 2014, the Company reaffirmsits guidance for annual module shipments to be in the range of 2.5 GW to 2.7 GW, including 400 MW to 500 MW of project recognition. In addition, the Company expects to build and/or hold up to 250 MW of project assets during 2014. The Company also reaffirms guidance for net revenue in 2014 to be in the range of approximately $2.7 billion to $2.9 billion.

The Company's Canadian and U.S. project revenue recognition is expected to be back-end loaded in 2014 due to permitting and construction scheduling as well as US GAAP accounting rules which, for most Canadian projects, only allow revenue recognition after the commercial operation date (COD) and the transfer of ownership to end customers. The estimated COD of all of the Company's late-stage projects in Canada, the U.S., Japan and China is subject to change without notice as a result of delays in permitting and construction, among other risk factors. The acceptance tests and closing process will start after COD. The length of acceptance tests may be affected by the solar radiation level and other weather conditions, therefore, the close of project sales transaction may not always occur in the same quarter of COD.

The Company has recently commissioned another module workshop in its flagship factory in Changshu, Jiangsu Province, China. This brings our total annual module production capacity to 3 GW. Meanwhile, the Company will start construction of a new solar cell production site in Funing, Jiangsu Province, China and expects to bring 60 MW of new cell capacity on line by the end of 2014. If fully built, the new site can host up to 1.2 GW of solar cell production capacity. While this new site provides room for continuous growth, the Company will make further investment decisions only if it determines that the market demands exist and will remain healthy for the long term.

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