Canadian Solar increases revenues and turns profits once again

Guelph, Canada - Canadian Solar Inc. announced its financial results for the third quarter ended September 30, 2013.

Net revenue for the third quarter of 2013 was $490.9 million, up 29.1% from $380.4 million in the second quarter of 2013 and up 50.6% from $326.0 million in the third quarter of 2012. Total solar module shipments in the third quarter of 2013 were 478 MW, compared to 455 MW in the second quarter of 2013 and 384 MW in the third quarter of 2012. Solar module shipments to the Japanese market represented 29.5% of total shipments in the third quarter of 2013, compared to 35.7% in the second quarter of 2013 and 5.7% in the third quarter of 2012. Solar module shipments in the third quarter of 2013 included 60 MW used in the Company's total solutions business, compared to 35 MW in the second quarter of 2013 and 21 MW in the third quarter of 2012.

Gross profit in the third quarter of 2013 was $100.2 million, compared to $48.7 million in the second quarter of 2013 and $7.3 million in the third quarter of 2012. The sequential quarterly increase in gross profit was primarily due to increased revenue contribution from the Company's higher margin total solutions business as well as higher gross margin from the Company's pure module business. The year-over-year increase in gross profit was primarily due to the increase in revenue contribution from the Company's higher margin total solutions business as well as lower manufacturing cost, partially offset by a decline in average selling price during the period. Gross margin in the third quarter of 2013 was 20.4%, compared to 12.8% in the second quarter of 2013 and 2.2% in the third quarter of 2012. The Company's gross margin for the third quarter of 2013 exceeded its original guidance, which was in the range of 10% to 12%, primarily due to the successful execution of its total solutions business plan, including the completion and sale of solar power plants to TransCanada and BlackRock, as well as higher gross margin from the Company's pure module business.

Operating margin was 11.3% in the third quarter of 2013, compared to 3.2% in the second quarter of 2013 and negative 10.6% in the third quarter of 2012. The sequential and year-over-year increase in operating margin was primarily due to higher gross profit partially offset by an increase in operating expenses.

Net income attributable to Canadian Solar in the third quarter of 2013 was $27.7 million, or $0.56 per diluted share, compared to net loss of $12.6 million, or $0.29 per diluted share, in the second quarter of 2013, and net loss of $43.7 million, or $1.01 per diluted share, in the third quarter of 2012.

Business Outlook The Company's business outlook is based on management's current views with respect to operating and market conditions, its current order book, global and local financing environment as well as the uncertainty in customer demand and solar project schedule. Management's views and estimates are subject to change without notice. For the fourth quarter of 2013, module shipments are expected to be in the range of approximately 480 MW to 500 MW. Gross margin for the quarter is expected to be between 13% and 15%. Shipment and gross margin expectations exclude potential project sales in the fourth quarter as explained below. In line with guidance for the fourth quarter of 2013, the Company now expects annual module shipments to be approximately 1.75 GW to 1.77 GW, at the top end of its previous guidance of 1.6 GW to 1.8GW.

Source: IWR Online, 13 Nov 2013