Vertically integrated solar company Canadian Solar has updated its third-quarter (Q3) guidance to reflect stronger-than-expected solar demand over the past few months.
The revision follows the sale by its subsidiary Recurrent Energy of 51% of the 200 MW Tranquillity solar power project in California to Southern Power a deal that has helped boost revenues above earlier projections.
Canadian Solar is also expecting to shift between 1.18 to 1.23 GW of solar modules for the quarter, up from the previous guidance range of 970 MW to 1.02 GW. This increased shipment activity will help to swell revenues to somewhere between $805 million to $815 million, up from the previous guidance of $570 million to $620 million.
Gross margin is also expected to rise slightly, reaching just higher than the range of 12% to 14% as previously outlined, buoyed by stronger-than-expected average module selling prices.
"We ended the third quarter with stronger than expected demand in our solar module business, led by the U.S., the U.K., Canada and Japan," said Canadian Solar CEO and chairman Shawn Qu. "We also benefited from the sale of a controlling interest in our 200 MW Tranquillity project in California. We are entering the fourth quarter of 2015 in an excellent competitive and financial position."
Qu added that he expects Canadian Solar to receive robust demand levels in the solar module business and further strengthening of the companys downstream activities.
In the summer, IHS suggested that Canadian Solar could be on course to usurp Chinese rivals Yingli and Trina as the world's leading supplier of module shipments for 2015.
Canadian Solar also confirmed separately that it had reached an agreement with LDK Solar to settle a legal dispute related to a 2012 arbitration award decision by the former Shanghai branch of the China International Economic and Trade Arbitration Commission. Costs incurred by Canadian Solar under this agreement will amount to $20.9 million, and the company will pay market prices for 64.3 million wafers from LDK Solar over a period of three years beginning December 11 this year.