Stock Update (NASDAQ:CSIQ): Canadian Solar Inc. Raises Shipment, Revenue and Gross Profit Guidance for the Third Quarter 2015, Settles LDK Arbitration Award Litigation

Canadian Solar Inc. (NASDAQ:CSIQ), one of the world’s largest solar power companies, today updated its business outlook for the third quarter of 2015 to reflect higher than expected solar demand in the quarter and the sale of 51% of the 200 MW Tranquillity solar power project in California by the Company’s wholly owned subsidiary, Recurrent Energy, to Southern Power, a subsidiary of Southern Company.

For the third quarter of 2015, Canadian Solar now expects its total solar module shipments to be in the range of approximately 1.18 GW to 1.23 GW, compared to its previous guidance, which was in the range of 970 MW to 1.02 GW, including approximately 99 MW of shipments to the Company’s utility-scale solar projects that will not be recognized as revenue in the third quarter of 2015. The Company now expects its total revenue for the third quarter of 2015 to be in the range of $805 million to $815 million, compared to previous guidance which was in the range of $570 million to $620 million. Gross margin for the third quarter of 2015 is expected to be at or slightly above the high end of previous guidance, which was in the range of 12% to 14%, primarily reflecting stronger than expected average module selling price partially offset by the Tranquillity project sale, which is expected to be profitable but with lower average gross margin.

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar, remarked:  “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.  We also benefitted 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.  We expect to see continued robust demand levels in our solar module business and we continue to execute on our already robust and steadily expanding utility-scale solar project development pipeline.”

Separately, on October 19, 2015, Canadian Solar reached an agreement with LDK Solar Co., Ltd. (“LDK”), to settle a legal dispute related to a December 2012 arbitration award decision by the former Shanghai branch of the China International Economic and Trade Arbitration Commission. Under this agreement Canadian Solar will incur a cost of RMB132.7 million ($20.9 million) and LDK will waive any rights and benefits in connection with theDecember 2012 arbitration award decision. In addition, under this agreement Canadian Solar will purchase from LDK, approximately 64.3 million pieces of wafers at market prices over a three year period starting on December 11, 2015. This agreement has been reviewed and approved by the Jiangsu Suzhou Intermediate Court. The Company expects to incur a charge for this settlement in the third quarter of 2015. (Original Source)

Shares of Canadian Solar closed last Friday at $20.68. CSIQ has a 1-year high of $40.08 and a 1-year low of $14.16. The stock’s 50-day moving average is $19.36 and its 200-day moving average is $27.06.

On the ratings front, Canadian Solar has been the subject of a number of recent research reports. In a report issued on September 28, Stifel Nicolaus analyst Sven Eenmaa initiated coverage with a Buy rating on CSIQ and a price target of $25, which represents a potential upside of 20.9% from where the stock is currently trading. Separately, on August 21, Standpoint Research’s Ronnie Moas upgraded the stock to Buy and has a price target of $26.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Sven Eenmaa and Ronnie Moas have a total average return of -9.4% and 7.4% respectively. Eenmaa has a success rate of 33.3% and is ranked #3238 out of 3801 analysts, while Moas has a success rate of 70.7% and is ranked #13.

Overall, 4 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $26.00 which is 25.7% above where the stock closed last Friday.

Canadian Solar Inc is a solar power company. The Company designs, develops and manufactures solar wafers, cells and solar power products.

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