Canadian Solar shares tumble 12% on Q2 earnings miss, weak guidance

NEW YORK - Shares of Canadian Solar Inc. (NASDAQ:CSIQ ) plunged 12% in premarket trading Thursday after the solar panel maker reported second quarter earnings that missed expectations and provided weaker-than-expected guidance.

The Guelph, Ontario-based company posted adjusted earnings per share of $0.02 for the quarter ended June 30, falling well short of the $0.20 analysts were expecting. Revenue came in at $1.63 billion, slightly above the consensus estimate of $1.59 billion but down 31% YoY.

Canadian Solar's outlook also disappointed investors. The company forecast third quarter revenue of $1.6-$1.8 billion, below Wall Street's projection of $2.22 billion. For the full year 2024, Canadian Solar now expects revenue between $6.5-$7.5 billion, compared to analysts' estimates of $7.66 billion.

"While we continue to navigate challenging market conditions, our focus remains on sustainable, profitable growth," said Dr. Shawn Qu, Chairman and CEO of Canadian Solar, in a statement. He noted the company is seeing "signs of market rationalization" as module pricing and input costs reach record lows.

Total module shipments in Q2 were 8.2 GW, up 30% sequentially but flat YoY. Gross margin declined to 17.2% from 19.0% in Q1 and 18.6% a year ago, primarily due to lower module average selling prices.

The company's e-STORAGE battery business saw its backlog grow to $2.6 billion, supported by a record 66 GWh pipeline. Canadian Solar also highlighted the initial closing of a $500 million investment from BlackRock (NYSE:BLK ) in its Recurrent Energy subsidiary.

Despite the earnings miss and cautious outlook, Canadian Solar maintained its full-year module shipment guidance of 32-36 GW. The company said it anticipates stabilization in the second half of the year as it adjusts capacity investments to ensure a "resilient financial profile" amid ongoing industry challenges.

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Source: Investing.com