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16-05-2025
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Canadian Solar Q1 Loss Lower Than Expected, Revenues Fall Y/Y
Canadian Solar, Inc. CSIQ reported a first-quarter 2025 loss of $1.07 per share, narrower than the Zacks Consensus Estimate of a loss of $1.50 per share. The figure, however, deteriorated from the year-ago quarter's earnings of 19 cents per share. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) Canadian Solar reported revenues of $1.20 billion, which beat the Zacks Consensus Estimate of $1.09 billion by 9.9%. However, the top line declined 10% from the year-ago quarter's figure of $1.33 year-over-year decrease was primarily due to lower sales of battery energy storage systems and solar modules. Canadian Solar Inc. price-consensus-eps-surprise-chart | Canadian Solar Inc. Quote Solar module shipments in the quarter totaled 6.9 gigawatts (GW), outperforming the company's guidance of 6.4-6.7 GW. The metric also rose 9.4% year over Solar's gross margin was 11.7%, which was higher than its guided range of 9-11%. The gross margin, however, declined 730 basis points year over year due to lower sales volumes of battery energy storage systems and trade-related operating expenses were $195.3 million, down 4.1% year over year due to the absence of impairment charges and lower shipping and handling and amortization charges totaled $143.7 million, up from $110 million recorded in the year-ago period. As of March 31, 2025, Canadian Solar's cash and cash equivalents totaled $1.58 billion, down from $1.70 billion as of Dec. 31, borrowings as of March 31, 2025, were $3.02 billion, up from $2.73 billion as of Dec. 31, 2024. For the second quarter of 2025, Canadian Solar expects total module shipments to be in the range of 7.5-8.0 GW, including approximately 500 MW of module shipments for its revenues are expected to be in the band of $1.9-$2.1 billion. The Zacks Consensus Estimate for second-quarter sales is pegged at $1.76 billion, lower than the company's guided company expects the gross margin to be between 23% and 25%.Total battery energy storage shipments are expected to be around 800 full-year 2025, the company now expects total module shipments to be in the range of 25-30 GW, including nearly one GW for its projects. It anticipates total battery energy storage shipments to be in the band of seven-nine revenues are expected to be in the band of $6.1-$7.1 billion. The Zacks Consensus Estimate for 2025 sales is pegged at $7.4 billion, higher than the company's guided range. Canadian Solar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Enphase Energy, Inc. ENPH reported first-quarter 2025 adjusted earnings of 68 cents per share, which missed the Zacks Consensus Estimate of 71 cents by 4.2%. The company's revenues of $356.1 million missed the Zacks Consensus Estimate of $362 million by 1.7%.SolarEdge Technologies, Inc. SEDG reported a first-quarter 2025 adjusted loss of $1.14 per share, narrower than the Zacks Consensus Estimate of a loss of $1.20 per share. The bottom line also improved from the prior-year quarter's loss of $1.90 per Solar, Inc. FSLR reported first-quarter 2025 earnings of $1.95 per share, which were down 11.4% from the prior-year quarter's figure of $2.20. The bottom line also missed the Zacks Consensus Estimate of $2.50 per share by 22%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Solar, Inc. (FSLR) : Free Stock Analysis Report Canadian Solar Inc. (CSIQ) : Free Stock Analysis Report Enphase Energy, Inc. (ENPH) : Free Stock Analysis Report SolarEdge Technologies, Inc. (SEDG) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
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16-05-2025
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Q1 2025 Canadian Solar Inc Earnings Call
Wina Huang; Investor Relations; Canadian Solar Inc Xiaohua Qu; Chairman of the Board, President, Chief Executive Officer; Canadian Solar Inc Yan Zhuang; President - CSI Solar; Canadian Solar Inc Ismael Guerrero; Chief Executive Officer of Recurrent Energy; Canadian Solar Inc Xinbo Zhu; Senior Vice President and Chief Financial Officer; Canadian Solar Inc Colin Rusch; Analyst; Oppenheimer & Company Philip Shen; Analyst; Roth Capital Partners Alan Law; Analyst; Jefferies Praneet Satish; Analyst; Wells Fargo Operator Ladies and gentlemen, thank you for standing by. Welcome to Canadian Solar's first quarter 2025 earnings call. My name is Sherry, and I will be your operator for today (Operator instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Wina Huang, Head of Investor Relations at Canadian Solar. Please go ahead. Wina Huang Thank you, operator, and welcome everyone to Canadian Solar's first quarter of 2025 conference call. Please note that today's conference call is accompanied with slides which are available on Canadian Solar's Investor Relations website within the Events and Presentation section. Joining us today are Dr. Xiaohua Qu, Chairman and CEO, Yan Zhuang, President of Canadian Solar subsidiary CSI Solar; Ismael Guerrero, Corporate VP and President of Canadian Solar subsidiary for Current Energy; and Xinbo, Senior VP and CFO. All company executives will participate in the Q&A session after management's formal remarks. On this call, Sean will go over some key messages for the quarter. Yan and Ismael will review business highlights for CSI solar and recurrent Energy respectively, and Ximbo will go through the financial results. Sean will conclude the prepared remarks with the business outlook, after which we will have time for questions. Before we begin, I would like to remind listeners that managements prepared remarks today, as well as their answers to questions will contain forward-looking statements that are subject to risks and uncertainties. The company claims protection under the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from management's current expectations. Any projections of the company's future performance represent management's estimates as of today. Canadian Solar asses no obligation to update these projections in the future unless otherwise required by applicable law. A more detailed discussion of risks and uncertainties can be found in the company's annual report on Form 20-F filed with the Securities and Exchange Commission. Management prepared remarks will be presented within the requirements of SEC regulation G regarding Generally Accepted Accounting Principles or GAAP. Some financial information presented during the call will be provided on both a GAAP and non-GAAP basis. By disclosing certain non-GAAP information, management intends to provide investors with additional information to enable further analysis of the company's performance and underlying trends. Management uses non-GAAP measures to better assess operating performance and to establish operational goals. Non-GAAP information should not be viewed by investors as a substitute for data prepared in accordance with GAAP. And now I would like to turn the call over to Canadian Solar's Chairman and CEO, Dr. Xiaohua Qu, Xiaohua, please go ahead. Operator Your line might be muted. Xiaohua Qu Thank you, Wina, and thank you all for joining our first quarter earnings call. Please turn to slide 3. We began the year with a solid performance. Module shipments reached a 6.9 gigawatts slightly above our guidance. Revenue totaled $1.2 billion at the high end of our range while gross margin of 11.7% modestly exceeded expectations. Profitability was impacted by lower contributions from storage, duties and tariffs, recurrence, ongoing transformation, and inter-company elimination. This resulted in a net loss to shareholders of $34 million or $0.69 per diluted shares. 2025 will face many of the same challenges that define 2024. Well, that, while near term headwinds remain. We are confident in the long term opportunities and will continue to invest in them. Please turn to slide 4. In the near term, we are tackling challenges that test us both operationally and financially. Structural overcapacity across the solar supply chain has prolonged the market downturn, putting pressure on molecule pricing in almost in most global markets. In addition to fierce competition, tariffs and shifting policies are raising costs and squeezing margins. To navigate these challenges, we are maintaining a profit focused approach to our module business, carefully managing volumes in less profitable markets, leveraging a (inaudible). Supply chain strategies and offering bundled sales. Storage continues to be a key differentiator and profit driver. We are also rigorously managing operating expenses and capital expenditures to support our bottom line and cash flow. Recently, we held an internal town hall meeting where I posted a question on behalf of the broader renewable energy sectors. Does this industry still have a bright future? My answer is a resounding, yes. Global electricity demand is growing at its fastest pace in years, and the rise of AI and other energy intensive applications is widening the energy gap. Solar power, clean, affordable, and easy to deploy can quickly meet this demand, especially when paired with storage. Canadian Solar has a proven track record of navigating policy shifts and market cycles, demonstrating our technological leadership and resilient in challenging times. Well, our operating environment continue to evolve. Our one constant, yes, our commitment to R&D and leadership through innovation. Please turn to slide 5. Over the past two months, we have announced several new products, showcasing our leadership across both solar and energy storage technologies. In Solar, we completed our first deployment of Canadian Solar's innovative anti-health technology in Australia. This technology protects solar panels from severe weather, reflecting our dedications to delivering durable, high performance solutions in even the most demanding environment. We also introduced our new anti high power (inaudible) gen two modules for utility scale and the CNI system. Built on our latest top com cell technology, these modules deliver a maximum power output of up to 660 watts and a conversion efficiency of up to 24.4%. By advancing our solar technology, we help customers lower their levelized cost of energy and improve project economics, reinforcing solar as one of the most cost-effective energy generation options. On the storage front, we achieved key milestones in both utility scale and residential offerings. At Intersolar in Munich, we officially launched our SolBank 3.0 Plus enhancements to the lithium-ion phosphate battery cell manufacturing process, elevate its performance beyond the already successful SolBank 3.0. This solution offers a 25 year lifespan near zero degradation for the first four years, and up to 12,000 cycles at 95% round trip efficiency. SolBank 3.0 plus can significantly reduce our customers' operational costs by boosting overall lifetime energy throughout-- throughput by over 13%. We are also proud that our residential energy storage solution EP cube, received the prestigious 2025 (inaudible) Design Award and gold at the 2025 News Design Awards. BP cube combines an aesthetically pleasing design important to homeowners with functional advantages like easy installation and flexible capacity options. It continues to gain strong traction in global markets. With that, I will now turn the call over to Yan, who will provide more details on our CSI solar business. Yan, please go ahead. Yan Zhuang Thank you, Xiaohua. Please turn to slide 6. In the first quarter of 2025, module shipments increased by 9.4% year-over-year to 6.9 gigawatts. We slightly exceeded our module shipment guidance, driven by incremental shipments to China. As the industry rushed to complete installations ahead of new policies taking effect on June the 1. Storage deliveries aligned with guidance totaling 849 megawatt hours. Revenue reached $1.2 billion and our gross margin declined by 640 basis points quarter-over-quarter to 13.4%, primarily due to lower energy storage shipments. While costs rose slightly partly from non-refundable VAT changes in China effective last December and slightly higher manufacturing costs in Southeast Asia on our blended supply chain strategy. Average selling prices improved with a higher share of shipments to North America. With shipping costs declining sequentially due to softening global shipping rates and our rigorous management of our printing expenses, we achieved a printing income of $2 million. Now turning to e-storage, please refer to page 7. In the first quarter, we recognized revenue from 849 megawatt hours of shift solutions. The softer performance was due to contract timing, and we expect a much stronger second quarter. Understandably, the ongoing US-China tariff negotiations remain top of mind for all stakeholders. While we cannot predict final outcomes, it is critical to recognize that these US energy storage projects, essentially for great resilience and energy dispatchability took years of planning and a significant investment. While clarity may take some time, the industry will work together to advance these projects. Like all market participants were navigating this uncertainty. For e-storage, the US accounts for upwards of one-third of our energy storage business expected for this year. We are actively engaging with customers to mitigate risks and ensure smooth project execution. Nobody were well positioned with our global blended manufacturing strategy. Beyond our planned [Kentucky] storage facility, we have cell manufacturing capabilities and supplier partnerships that will allow us to offer customers flexible options starting in 2026. Demand for storage is stronger than ever, not just in the US, but globally. As of March 31, our record pipeline of 91 gigawatt hours, including $3.2 billion in contracted backlog, highlights the structural growth potential of energy storage worldwide. For example, we recently secured another major project in Latin America. Please turn to slide 8. Diego de Almagro, a leading Chilean power generation company, selected storage to supply a 912 mega megawatt hour battery energy storage system for the Diego de Almagro project in Chile's Atacama region. Like many in e-storage's global track record, now exceeding 11 gigawatt hours, this project highlights the value of energy storage. It strengthens grid reliability, optimizes renewable energy use, and it ensures secure continuous power for industrial demand. Now let me hand the call over to Ismael, who will provide an overview of recurrent energy, Canadian Solar's global project development business. Ismael, please go ahead Ismael Guerrero Thank you, Yan. Please turn to slide 9. In the first quarter, we generated $125 million in revenue. Gross margin was 18.6%, driven by project sales in Latin America. Due to the operating costs of our platform and the ongoing scaling of our IPP portfolio, we posted an operating loss of $12 million for the quarter. Regarding our business transformation, we remain focused on execution. Currently, we have 1.2 gigawatts peak of solar and 1.4 gigawatt hours of energy storage projects under construction in Europe and the US. In January, our 35 megawatts peak [Montalco] project in Lazio, Italy reached commercial operation. The PV project was contracted with expo with an attractively priced PPA. In addition, [Montalto] is also one of the first co-located PV and best projects in the Italian market. The best portion won a 15 year fixed capacity payment in a public auction, and it is now under construction. In the US, we secure tax equity and project finance for (inaudible), a 200 megawatt hour, merchant storage project in (inaudible), Texas. This is testament to the strength of our projects and financing teams, as well as the strong support from our capital partners in enabling innovative solutions to drive impact. Construction for Fort Duncan is complete and under commissioning as we speak. In line with our global growth strategy, we secured a $450 million multi-currency credit facility, which includes an accordion feature that allows for potential upsizing. This corporate facility provides flexible and scalable financing with disbursement in USD , EUR, GBP and AUD, supporting our strategy to expand our IPP portfolio across diverse markets and geographies. Given the uncertain policy environment in the US, we are proactively implementing safeguards for all major IPP projects, including safe harboring equipment. While the long term effects of tariffs remain to be seen, we expect very limited impact, given recent progress in trade negotiations. Now please turn to slide 10 for an update on our pipeline. As of March 31, 2025, we have secure interconnections for 9 gigawatts of solar and 16 gigawatt hours of storage globally, excluding projects already in operation. Our total project pipeline now stands at 27 gigawatts of solar and 76 gigawatt hours of energy storage. While we continue to expand our pipeline, the availability of easy to develop land with relatively cheap interconnections is becoming increasingly scarce. We are now prioritizing our core markets, the US and Europe, while in other regions we focus primarily on low cost greenfield development. Now, let me hand the call over to Xinbo, who will go through our financial results in more detail. Xinbo, please go ahead. Xinbo Zhu Thank you, Ismael. Please turn to slide 11. In the fourth quarter, we shipped 6.9 gigawatts of modules, slightly above guidance and delivered 849 megawatt hours of energy storage solutions in line with expectations. Revenue reached $1.2 billion at the high end of our forecast. Gross margin of 11.7% exceeded guidance. The 260 basis point sequential decline was primarily due to lower energy storage shipments. While the 730 basis point year-over-year decline was driven by lower module ASP. Operating expenses decreased 4% year-over-year driven by lower shipping costs. Last quarter's results included non-recurring impairment charts related to certain manufacturing and solar assets, making the year-over-year comparison more reflective of our ongoing operational performance. Net interest expense in the first quarter was $28 million compared to $9 million in the fourth quarter of 2024 and the less than $1 million in the first quarter of [20,194]. The current quarter reflects a more normalized interest expense as prior comparative periods benefited from non-recurring interest income items. Net foreign exchange loss was $14 million primarily due to dollar weakness and tariff related pressures. Total net loss was $34 million or $0.69 per diluted share. These results included a positive HLPV impact of $26 million or $0.38 per share from tax equity arrangements tied to certain US operating projects. Now, let's turn to cash flow and the balance sheet. Please turn to slide 12. Net cash flow used in operating activities during the first quarter of 2025 was $264 million. This outflow was primarily driven by increased inventories and project assets. Total assets grew to $13.9 billion driven by investments in private assets and solar power systems, positioning us for longer term value creation. In the first quarter, we allocated $256 million in capital expenditures, primarily towards US manufacturing initiatives. Our full year 2025 CapEx outlook remains unchanged at around $1.2 billion. We ended the quarter with a cash balance of $2.0 billion and total debt of $5.7 billion reflecting borrowings for capacity extension, working capital, and the project and operational assets development. Now let me turn the call back to Xiaohua who will conclude with our guidance and business outlook. Xiaohua, please go ahead. Xiaohua Qu Thank you, Xinbo. Please turn to slide 13. For the second quarter of 2025, we anticipate CSS Solar's module shipment will range between 7.5 to 8 gigawatts, including approximately 500 megawatts allocated to our own project. We also expect to deliver between 2.4 and 2.6 gigawatts of energy storage solutions during this period. We project total second quarter revenue to be in the range of $1.9 billion to $2.1 billion, with gross margin expected to be between 23% and 25%. The anticipated margin improvement reflects strong energy storage shipment and includes a sizable margin contribution from the deconsolidation of a US project. This deconsolidation was released previously eliminated in-company gross margin on CSI solar components installed within the project. We continue to operate in an environment marked by global pricing volatility and evolving policy uncertainty which limits our margin visibility. Based on our recent assessment of market and geopolitical development, we are updating our full year guidance as follows. For the full year of 2025, we update module, volume guidance to 25 to 30 gigawatts, including approximately 1 gigawatt to our own project. (inaudible) the storage shipments, we provide conditional guidance between 7 to 9 gigawatt hours, including approximately 1 gigawatt hour allocated to our own projects. The reduced module volumes primarily reflect our strategic reduction of exposure to a less profitable markets, while the expected storage adjustments relates to US volumes affected by trade negotiations. As a result of this volume adjustment, we now expect full year revenue to be between $6.1 billion and $7.1 billion. With that, I would now like to open the floor for questions, operator? Operator Thank you. We will now be conducting a question and answer session. (Operator instructions) Colin Rusch, Oppenheimer & Company. Colin Rusch Thanks so much guys. There's a lot of variables here, and Xiaohua, obviously you've gone through a variety of policy shifts. One element that I'd love to get a bit more detail on is around the FEOC provisions that were released in the budget, I guess if you guys look at how that might evolve and get solidified in the budget, how does that impact your plans for US capacity investment. And how should we think about that, some of those elements impacting the variability in your guidance. Xiaohua Qu Well, [sciences] calling. It's a good question, but also a tough question. Now, the new draft of the FEOC was only released two days ago by the House Ways and Means Committee, and it's only the first draft. We believe it will not look like this. At the final bill, final reconciliation bill. So it's hard to comment at this moment because in the next two, three years there will be, we believe there will be changed and we will also put our opinion and our suggestions through the relevant representatives and signatures, and also to the administration. So I will not comment now because it's only two days old draft and only the first draft from the House Ways, I mean. Colin Rusch Perfect, appreciate that answer. And then just shifting gears to the balance sheet. As you move through this year, we've seen some of the long term debt increase, assuming that the bulk of that is around projects. How should we think about target ratios for you guys from a cash flow perspective and a leverage perspective? Xiaohua Qu Yeah, Xinbo, do you want to answer this question? Xinbo Zhu From recurrent perspective, we are still in the transition of, from the project (Inaudible - microphone inaccessible), so we are continuing, to do our projects and (inaudible)So the leverage of recurrent will increase a little bit for, such as solar, we will maintain a similar leverage ratio to balance the growth and, yeah, our capital structure. Colin Rusch Okay, thanks guys. I'll hop back in queue. Operator Philip Shen, Roth Capital Partners. Philip Shen Hi, thanks for taking my questions. In terms of the 2025 guidance, you lowered your module shipments by 15%, and battery shipments, I think by 30%, but the revenue guide only came down 10%. Can you walk us through again, or just walk us through how revenue is able to be down only 10%? Do you expect pricing to go higher? Sorry, if I missed some of your explanation. Thanks. Xiaohua Qu Yeah, maybe you Wina, you are at the best position to answer this question. Wina Huang Hi so, as Sean mentioned, we are (Inaudible - microphone inaccessible) strategy, which means that the volume for modules in it is less profitable markets, whereas, for storage, this is our best estimate within the ongoing trade negotiations. So this is still very fluid, as you can see it's a pretty wide revenue guidance range. Philip Shen Okay, thank you guys. And as it relates to the draft House bill, I know Xiaohua, you talked about the FEOC rules and how that might need to be changed or you might, you expect it to be changed ahead. They also have new rules as it relates to the ITC and PTC. If they were to pass, now they're looking to get place and service requirements instead of construction starts to secure the ITC and PTC. How would you expect that to impact your installations over the next two years? Do you think there would be modest limited impacts on the recurrent business, or do you think there might be some challenges with that new language? Thank you. Xiaohua Qu Yeah, Philip, this is also a very good question. The FEOC is important and the ITC schedule is also very important. So we are paying lots of attention to the draft from the (inaudible) committee and as I said, I expect this to change. It looks like it's still far from the final law. However, the ITC, that means a lot to developers and to also to manufacturers. So, and Canadians are both developers and manufacturers. So indeed, ITC, will have a impact, a significant meaningful impact if it is give it back. Our calculation shows the one year of ITC credit means several 100 millions of dollars to Canadian solar alone, not to mention the whole industry. So it's very important and we will put in our suggestion and our opinions. But on the other hand, Philip, if you remember, there has been talking of ITC phase out several times in the past 10,15 years, and I believe ITC was first introduced during President Bush, right? Time and then in every year, not in every President afterward, and also the House and (inaudible) reduced extended this ITC. So but we will also have been preparing for ITC phase out time and for just for recurrent, but I remember recurring I had like safe harbor for modules and other equipment several times in the past 15 years and every time ITC got extended. So, the ITC seems to have good longevity so we'll see how it looks like this time, but the industry and also recurrent plus the Canadian Solar, we are prepared to go through another round. I believe the solar project and the (inaudible) the price is very economic these days, and also the electricity demand is high. So whatever the ITC is, I think the industry will adjust, eventually will adjust and then continue to grow. Philip Shen Okay, thanks, Xiaohua. I had a follow up question on the Q2 margin guide, and you gave some detail around the strength is due to storage and I think the deconsolidation of the US project. Can you share a little bit more color there? What is the expectation for storage margins these days? Historically I think you guys have talked about 20%, but is it closer to mid-20% or even higher and just provide a little bit more detail on the consolidation. Thanks. Xiaohua Qu Provide comments on the energy storage and margin and then Ximbo, you may want to explain the de consolidation of solar project. So on the storage side, the Q2 storage shipment happened in Q1, so it was before this tariff war and so margin wise, I can only say it's about 20%. I was pretty healthy and also volume wise Q2 is going to be much higher. So the guidance is 2.6 to 2.8, 2.4 to 2.6 gigawatt hour, so it's much higher than Q1. Xinbo Zhu Yeah, let me call the deconsolidation. We have a storage project with fixed rate total agreement covering about 80% of the project's lifetime. According to the accounting standard, when the projects reach COD, the majority of the risks and controls are transferred to the counterparts. So, according to accounting standard, we need to deconsolidate this project from our balance sheet and it release the intercompany profit in early quarters and it's a one-time event contributing about 5% to 6% of gross margin in next quarter. Philip Shen Okay, thank you. And would you expect the strength? What kind of gross margins could we see in Q3 and Q4? Thanks. Xinbo Zhu No, we're not guiding this. Philip Shen Okay, I appreciate it. Thank you guys. I'll pass it on. Operator Brian Lee, Goldman Sachs. Hey guys, this is [Tyler Bissit] on for Brian. Thanks for taking our questions. So you guys lowered storage volume expectations due to the trade negotiations, and, can you provide some details on what sort of tariff assumptions are embedded in your guidance? I know there are some recent negotiations. I just want to confirm what's embedded there. And similarly you mentioned offering some flexible sourcing capabilities, so can you provide some more details on kind of the pricing differentials of leveraging different sources versus your existing products? Xiaohua Qu Yeah, Yan, do you want to handle this question? The energy storage guidance, new guidance. Yan Zhuang I think to the sound to mind, gigawatt hour actually covered the different uncertainties already. So that is, that included as many days exemption and also the uncertainties after that. So it can be as low as 7 or as high as 9, so that's our assumption. And any sort of details on just like pricing differential from different sourcing capabilities? Yan Zhuang Okay, and actually for the storage contracts, most of the -- we will have a change of law protection. Some of them are like cap pricing and the other others we shared on tariff. So even, with the different uncertainties, I think the 7 to 9 gigawatt hour, we continue to have a healthy margin. Xiaohua Qu Yeah, Brian, it just add one comment that the sourcing, flexibility will only help us in 2026, the sourcing we are seeing sourcing flexibility with our suppliers start to build and ramp up their capacities outside China, but most of this will only help us in 2026. So 2025, we have to deliver all the storage project from China. So the impact does have the (inaudible) does have an impact. And because of that, some of customers asking to push their project deliver to next year. And when we have this non-China battery cell option ready, so that accounts for most of the change on the guidance. Philip Shen Super helpful color. Appreciate that. And then you discussed some pull forward of demand in China given some policy changes there. Do you have any sort of expectation for a shipment growth next year in China? Xiaohua Qu Yan, do you want to answer this question? The shipping growth in China. Yan Zhuang Yeah. So, we're still waiting for policy clarification at provincial level, which is the action points, right? So, before that, the investment decisions in China are mostly on health. So, however, from our understanding about the market dynamics, we think, it will have a few months of adjustment in China. But after that, once the clarification, once we have the policy clarification, they should, it should, it will not be a disaster. The demand will start to pick up. But however, I think the second half will be weak. Next year, we don't really know because there's a lot of uncertainty. We're still waiting for the policy clarification. However, we believe the healthy demand for storage is going to come because in the past, we, most of the storage demand in China was kind of mandatory on solar. So, but since this policy change, the policy 133, think it will be, we'll have a free trade market. The trading market will actually bring in a real demand for storage. So we anticipate a healthy growth of high quality storage projects coming up next year. Perfect. Really appreciate the color. Thank you. Xiaohua Qu Thank you. Operator Alan Law, Jefferies. Alan Law Thanks for taking my question. A follow-up question on the 6% margin contribution of this project. So I would like to know, there's a fixed rate agreement covering the project, so based on the accounting standard, we will have to record the the profit, but I would like to know is it a one-off, just to confirm, is it a one-off impact on (inaudible) or like how does it amortize over this. Xinbo Zhu So, accounting perspective, it's a one off in time until Q2 this year. Alan Law Okay. Thank you. That's clear. So, Q3 onwards, unless you have other projects that are the consolidated, otherwise, there is only one of Q2, right? Thank you. And then next question is, just follow up on US policies because there's a lot of turbulence in the past one week, would like to check on your view because the language is actually saying that at least for the next two years if a FOCE is not having the majority state, then we'll be still able to get 45x. Just to reconfirm our company CSIQ, it is actually Canadian owned and also it's for your understanding, it's not an FOCE or what do you think about that? Xiaohua Qu Canadian solar itself is Canadian owned and also traded on NASDAQ. So there are common shareholders from the US stock market. Now Canadian Solar holds about 65% of CSI solar, which is trading on Shanghai stockings, which is organized under the Chinese corporate law and is trading on Shanghai Stock Exchange. And then CSI Solar invested into the facilities in US, including the module factory in Mesquite, also the cell factory in Jeffersonville. Indiana, and it storage factory in Shelbyville, Kentucky. So if the current language in the new draft stay as the, as yet, then all of these three facility will be impacted. We'll have to change the ownership structure in order to fit with the comply with the new laws. But on the other hand, as you see that, CSIQ, which is a Canadian company, still holds 65% and it's the controlling shareholder for CSI Solar. So, I suppose that it will be much easier for us to change the structure or maybe to invite some third party investors, in order to make all three entities complying with the new rules. But I also mentioned when I answered the previous question from Philip Shen that, what we, what released by the House and the means committee two days ago was only the first draft. We expected to go through, made many changes before it become the law. So there's a question of how fast the reconciliation will go through. Some say it's July for the August recess, and some say it's September, so we'll see, we're not expert how the legislature bodies work. However, we are sending our comment and opinions through our channels and, so I hope the, final bill will consider all this and final bill will, I hope the final bill will truly help to make manufacturing back to get manufacturing and go back to China rather than otherwise, and that I hope. Yan Zhuang Go back to the US, sorry. Xiaohua Qu Yeah, this is about US. What I'm, I've been talking is about US is about a house (inaudible) draft of the new requirement and also I answered your question on FEOC. Alan Law Thank you. So, next question is a, because I saw on a news mentioning Canadian so that is having a (inaudible) commitment in Ethiopia. So we'd like to know what's your plan there in terms of modules or plan for sales. Xiaohua Qu Yeah, that's not true. We would, our business development people have travelled around the world, so they travel to Ethiopia, but, we haven't made any committed, like decision to any activities in Ethiopia yet. Alan Law I see. So there's some probably due diligence, but not up to the stage of commitment yet. Xiaohua Qu Right, we are developing and exploring options, but no, there has, we haven't committed anything. Alan Law I see. So, my last question is about the guidance, would like to know, like, the guidance, module guidance has came down. I would like to know if that main the difference versus last time is that mainly the US volume. Xiaohua Qu Yan, should you answer this question? Yan Zhuang Yeah. So the US annual volume stays, so we don't have a new update on that. Xiaohua Qu Okay, so yeah, so what means the shipment to US is pretty much still what we guided before, and this volume reduction reflects the reduction of unprofitable sales to other market. Alan Law Understood. That's very clear. I'll pass. Thanks a lot for my questions. Operator Praneet Satish, Wells Fargo. Praneet Satish Thank you. Good morning. Just going back to the FEOC draft legislation, I guess the question here is on your Indiana, Kentucky facilities. Does it make sense to put those on pause? You maintained your CapEx guidance $1.2 billion, but until you get final clarity on the rules, is there a chance that maybe some of that CapEx comes down, you ship the projects. Or are you confident that the draft language will change with the future revisions or you see a path here that even if it doesn't change through ownership changes, bringing in third party investors that you can comply with the rules. Xiaohua Qu The Jefferson, Jeffersonville in Indiana factory, as you mentioned is in the middle of the building, construction, and also the equipment. Well they're shift in the phase of most of the Phase 1 equipment. And those Phase 1 equipment, which is about 2 gigawatts of capacity, solar cell capacity, those equipment, stay in the warehouse in Indiana right now waiting for the building to complete. So I think. Phase 1 of about 2 gigawatt, the, Jeffersonville facility, we have announced a proposal, a plan to reach 5 gigawatt and we cut into Phase 1 and Phase 2. So we are quite conservative when it comes to actually spending money. So at this moment, Phase 1, as I said, equipment are almost there. So we will, I think we will complete the Phase 1. Well, and the Phase 2 decision will probably be made, in the summer or after summer, the final decision. And so I hope they, I think this budget reconciliation will come to a conclusion, final form, either before the summer or after the summer. So in a way that we are not spending a lot of money on the Jeffersonville, other than what we already committed. And so the schedule is in parallel with the schedule of this budget reconciliation process. So if somehow, we think the final language will be reasonable and final language about FEOC will be reasonable. And, but also as you said, we are ready to change the capital structure once the policy is clear, the language is clear, the legal explanation is clear, then we will make our existing capacity to meet with the whatever the new language. But we don't want to completely stop. So we are still continuing with design, some final like detailed design of the factory and also certain simple construction work. Because the IRA itself only have a few years of shelf time, right? Even the previous original IRA already contains a face down after 2030. And I think by 2035, right, all the ITC and also the advanced manufacturing acquired ITC, the so-called 45x will stop. So, that's the only final time, so only finite amount of time, limited amount of time. So if we delay too much, the project will become uneconomic. So we'll balance this and we're spending some money to keep the construction and design work going. And however, for most of the equipment other than what we are already shipping, we will probably only be able to make decision. Let's say in August or September. I hope by that time, this budgetary cancellation is already completed. Praneet Satish Okay, that's that's helpful. And maybe one more on the recurrent business here. So you know at least in the US, PPA prices are going up and we're seeing on the gas side for CCGT, it costs and prices are going up a lot with data center demand. So is that giving you more headroom on the solar and storage side to increase PPA prices and absorb a lot of the cost increases that we're seeing from all the trade and policy uncertainty, and then are you any more inclined for long term ownership of assets versus monetization in the current environment? Xiaohua Qu Yeah, Ismael, this is a question for you. Ismael Guerrero Thank you, Xiaohua. Thanks for the question. We see the market in a similar way as you do. We are experiencing the same things you are referring to. In general, with the capital we have a limited capability to hold a certain amount of projects and we are continuously assessing every time a project reaches the RTB status, whether we should sell it or we should keep it in operation. So, how many projects we keep in operation is a decision taken based on the amount of money we have available. And the status of the project and which are better to hold and better to sell. But the market remained very attractive. This is what we are seeing both in the US and Europe. Praneet Satish Got it. Okay. Thank you. Operator This concludes our question and answer session. I would like to turn the conference back over to management for closing remarks. Xiaohua Qu Thank you and thank you for joining us today and for your continued support. If you have any questions or would like to set up a call, please contact our investor relations team and take care and have a great day. Operator This concludes today's conference. You may disconnect your lines at this time and thank you for your participation.
Washington Post
15-05-2025
- Business
- Washington Post
Canadian Solar: Q1 Earnings Snapshot
KITCHENER, Ontario — KITCHENER, Ontario — Canadian Solar Inc. (CSIQ) on Thursday reported a loss of $34 million in its first quarter. On a per-share basis, the Kitchener, Ontario-based company said it had a loss of 69 cents. Losses, adjusted for non-recurring gains, were $1.07 per share. The results exceeded Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for a loss of $1.50 per share.
Bloomberg
13-05-2025
- Business
- Bloomberg
Chinese Firms to Invest $1.75 Billion in Ethiopia Mining, Solar
Ethiopia expects five Chinese companies to invest a total of $1.75 billion in the East African nation, mainly in solar-cell manufacturing and mineral exploration, according to Finance Minister Ahmed Shide. Shanghai-listed CSI Solar Co., in which Canadian Solar Inc holds a majority stake, will spend $250 million on a plant producing solar modules and energy-storage products, while Sequoia Mining & Processing Plc plans to invest $600 million in coal exploration.
Yahoo
03-05-2025
- Business
- Yahoo
Canadian Solar (NASDAQ:CSIQ) stock falls 14% in past week as three-year earnings and shareholder returns continue downward trend
If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. Long term Canadian Solar Inc. (NASDAQ:CSIQ) shareholders know that all too well, since the share price is down considerably over three years. Regrettably, they have had to cope with a 66% drop in the share price over that period. The more recent news is of little comfort, with the share price down 43% in a year. On top of that, the share price is down 14% in the last week. Since Canadian Solar has shed US$106m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. During the three years that the share price fell, Canadian Solar's earnings per share (EPS) dropped by 29% each year. The 30% average annual share price decline is remarkably close to the EPS decline. That suggests that the market sentiment around the company hasn't changed much over that time, despite the disappointment. In this case, it seems that the EPS is guiding the share price. The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers). It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our free report on Canadian Solar's earnings, revenue and cash flow. Investors in Canadian Solar had a tough year, with a total loss of 43%, against a market gain of about 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Canadian Solar is showing 4 warning signs in our investment analysis , and 2 of those are concerning... Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
