Canadian Solar posts positive YOY results; sees sequential declines

The Canadian photovoltaic module manufacturer has achieved respectable quarter one figures. For example, module shipments increased by 31.9 percent from the first quarter of 2010 to reach 244 megawatts (MW). This is also slightly up from the 237 MW shipped in the fourth quarter of last year.

Once again, the European market represented the lion’s share of the company’s sales in the first quarter of 2011 at 75.7 percent; North America, and Asia and others regions represented 12.2 percent each. This is in comparison to 88.5 percent, 5.7 percent and 5.8 percent, respectively, in the first quarter of 2010.

Meanwhile, quarter one net revenue increased 31.6 percent from $336.9 million in the first quarter of 2010 to reach $443.4 million. In comparison to the fourth quarter of 2010, it was down by 2.1 percent.

While gross profit sequentially declined from $77 million in the fourth quarter to $65.3 million, it did increase by an impressive 55.8 percent from the first quarter of 2010. Gross margin, on the other hand, was 14.7 percent in the first quarter, compared to 17 percent in the fourth quarter (Q1 2010: 12.4 percent).

In a statement, Canadian Solar explained: "The sequential decline in gross margin was primarily due to lower average selling prices, relatively high raw material costs and costs associated with normal holiday-related factory shutdowns."

In terms of operating margin, a decrease of 1.6 percent was experienced from the fourth quarter of 2010, from 9.3 percent to 7.7. percent. However, this is up from the first quarter of 2010, which saw an operating margin of 6.3 percent.

Shawn Qu, chairman and CEO of Canadian Solar, commented: "First quarter 2011 results were in line with prior guidance. Based on sales volumes and customer feedback, Canadian Solar continues to build a successful downstream brand and gain market share in key solar industry markets worldwide.

"Of note, the Canadian market continues to be encouraging, with sales volumes expected to nearly double in 2011 compared to 2010. Also, indications are that the demand in Japan will return to more normal levels in the third quarter of 2011, once activity levels recover from the recent natural disaster. Finally, we continue to expand our brand and business in Germany and the U.S., among other markets."

Looking ahead

For the second quarter of 2011, the company says that shipments are expected to be in the range of approximately 245 MW to 255 MW, and gross margin should be between 13 and 15 percent.

Furthermore, its in-house cell and module capacities, which are 220 MW and 350 MW respectively, for the current quarter, are expected to be nearly fully utilized. This, says the company, reflects the strong endorsement of Canadian Solar products in the marketplace.

Canadian Solar adds that it remains on track to expand its annualized capacity for solar cells to 1.3 gigawatts (GW), and annualized capacity for modules to two GW, both by mid-2011.

For the full year 2011, the company reiterates its previous guidance of shipments of approximately 1.2 GW to 1.3 GW.