Canadian Solar Faces Challenges in Solar Industry
Shares of Canadian Solar are plummeting as the company falls short on its quarterly earnings and sales. This latest setback adds to the struggles faced by solar companies operating in a high-interest rate environment.
Canadian Solar (ticker: CSIQ) reported third-quarter earnings of 32 cents per share, a significant decline from the $1.12 earned in the same period last year. These figures fell well below Wall Street's estimates of 82 cents per share, according to FactSet. Moreover, the company's revenue of $1.85 billion missed expectations of $2.03 billion. However, there was a 39% increase in solar module shipments during this period.
For the fourth quarter, Canadian Solar anticipates total revenue between $1.6 billion and $1.8 billion, which is lower than analysts' expectations of $2.65 billion.
The company highlighted that it currently has $2.6 billion in e-Storage contracted backlog as of November 14. Approximately half of this backlog is expected to be delivered in 2024, which is likely to improve profit margins due to the favorable cost environment. E-Storage refers to Canadian Solar's utility-scale battery energy storage unit and platform.
Despite facing challenges in the form of higher inventories in particular markets due to the prevailing higher interest rate environment, Chairman and CEO Shawn Qu expressed satisfaction with solid profitability achieved in the third quarter of 2023. Qu reflected on the continued progress made in capacity diversification efforts.
The broader solar industry has been experiencing difficulties in recent times, primarily due to the impact of high interest rates on consumers' ability to finance solar installations.
In premarket trading, Canadian Solar stock dropped 15% to $17.83. As of today, shares have declined by 32% for the year.
All Rights Reserved © 2024
Post a comment