China-based Canadian Solar reports Q1 loss on improved net revenues
After reporting a net loss for 2007’s first quarter, Canadian Solar Inc. (Nasdaq: CSIQ) executives said in a Monday morning conference call they expect customer orders and increased manufacturing capacity to result in second quarter profits.
Winter is a traditionally slow period for the solar cell market, CFO Bing Zhu said in the conference call. Zhu also cited the Chinese New Year on Feb. 18, 2007, which forced a shutdown of manufacturing facilities, as a factor in the revenue numbers. Based on current market conditions and customer order backlogs, Zhu expects $55 to $58 million in revenue for the second quarter. Prior to this morning’s guidance, analysts were predicting second-quarter revenues of $49 million.
Before the start of trading today, Canadian Solar reported a 2007 first quarter net loss of $3.9 million, or $0.14 per diluted share, compared with a loss of $7.1 million, or $0.46 per diluted share, for the first quarter of 2006. On strengthened worldwide sales, the company nearly doubled net revenues to $17.5 million in this year’s first quarter, from $8.8 million a year earlier
In midday trading, the stock was the fourth-highest percentage gainer among small-capitalization companies. At 1:06 p.m. ET Canadian Solar was up $1.08 at $11.29. Since the stock was first issued in November, shares have ranged between $8.72 and $16.73.
“We are seeing healthy demand for our products starting in March,” Canadian Solar CEO Shawn Qu said on the conference call. “Looking forward, we expect to set records in revenues and product shipments. We expect to return to profitability in the second quarter.”
The Jiangsu, China-based company – it was incorporated in Canada in 2001 – designs, manufactures and sells solar module products that convert sunlight into electricity. Germany buys the largest share of CSI’s products, followed by Spain. The United States or Italy will probably rank third in sales this year, Qu said.
In April, the company achieved full regulatory approval to sell solar products in California, Qu also announced on the call. Although Canadian Solar will continue selling to the United States, he said the higher profit margins of the European market have proved more lucrative thus far.
