North Coast Solar Stocks

November 17, 2009

Canadian Solar sees doubling shipments in 2010

Filed under: CSIQ — Tags: , , , , — Jason @ 1:17 pm

Tue Nov 17, 2009 1:17pm EST

* Q3 shr $0.69 vs est of $0.54

* Backs FY shipment view, sees shipments doubling in ’10

* Says Q3 ASP was “just over” $2, sees Q4 prices below $2

* Sees Q1 ASPs down 7 to 8 pct sequentially, on Euro basis

* Shares rise 7 pct to new year-high

Nov 17 (Reuters) – Canadian Solar Inc’s (CSIQ) third-quarter profit rose sharply on strong demand, comfortably beating estimates, and the company said it expects to more than double shipments in 2010, sending its shares up more than 7 percent to their highest levels in a year.

The company, which backed its 2009 shipment view of about 295 megawatts (MW) to 305 MW, currently sees shipping about 600 MW to 700 MW in 2010.

On a conference call with analysts, the company said it had “reasonable” visibility into the first quarter and 2010.

“We have seen reasonable visibility. Our customers have already given us firm purchase orders for both December and January,” company executives said.

The company added that while the first quarter was usually weak, the first quarter of 2010 will be relatively stronger compared with last year.

Canadian Solar said major markets, including Germany, Italy and the U.S. would drive demand, adding that it expects strong growth from newer markets, such as Canada, Japan and China.

“For 2010…countries such as France and India might prove to be dark horses,” a company executive said.

“Basically our strategy is to improve our position in traditional markets such as Germany, Italy and Spain, while at the same time, diversifying into other significant markets.”

Given strong demand, Canadian Solar said it plans to increase its solar module production capacity to 1 gigawatt by the end of April 2010 from 820 MW currently.

The company, however, warned that average selling prices (ASP) would continue to fall.

“Third-quarter ASPs were just over $2, which reflects the industry average,” the company said, adding that prices in the fourth-quarter would likely come in below $2.

Canadian Solar said it was modelling for a sequential decline of about 7 percent to 8 percent for the first quarter, on a Euro basis.

While a fall in prices might be bad for component companies, customers benefit as the lower prices bring progress towards so-called “grid parity”, the point at which renewables cost the same as fossil fuel-based forms of power generation.

For the latest third-quarter, the company earned 69 cents a share, more than double the 31 cents a share it earned last year, comfortably beating estimates of 54 cents a share.

Sales nearly doubled sequentially to $213.1 million, coming in above Wall Street view.

Shares of the Chinese solar-cell maker rose $1.35 to a year-high of $21.05, before paring gains to trade up 2 cents at $19.72 Tuesday on Nasdaq. The stock has so far risen nearly seven-fold from a March low.

About 3.4 million shares changed hands in intra-day trade, 2.5 times the company’s 10-day moving average.

(Reporting by Adveith Nair in Bangalore; Editing by Jarshad Kakkrakandy)

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