Recall that Canadian Solar (CSIQ) was one of the best-performing stocks on the Nasdaq last year. After being left for dead previously, the shares rode renewed interest in solar to go from $3 per share to more than $30.
But after busting out above $40 earlier this year, Canadian Solar was hit by news that its first-quarter earnings were heavily affected by the cold winter. Many of its solar projects were delayed, making the Q1 numbers light. Investors worried that there was something more at work than just the cold weather and perhaps the poor results signaled that Canadian Solar's entire 2014 plans would be disappointing.
Those worries, combined with the spring pull back in momentum stocks and general concerns this year surrounding the ongoing tariff battle between the U.S. and China, helped cut Canadian Solar's stock price in half to as low as $21.
But this morning Canadian Solar reported second-quarter numbers and the stock is now rocking. It indeed seems as if the Q1 numbers were a one-off due to weather. The latest results showed strong module demand from Japan, Canada, the U.S., Germany and the U.K. It also showed that utility-scale solar projects -- which Canadian Solar has emphasized in recent years as they have better margins and longer-term visibility for revenues -- continued strongly.
Second-quarter solar-module shipments came in at 646 megawatts, which was higher than the company guidance of 600 to 630 MW.
Of these modules shipped in the quarter, 70 MW were for the utility-grade solar projects in their total solutions group, which was higher than 49 MW used for those purposes in Q1 and 35 MW in Q2 2013.
The company's gross margins came in at 19%, which was up substantially from a year ago. Also, its third-quarter guidance at the high end ($760 million to $810 million) was higher than the analysts' consensus estimates ($784 million).
Finally, the company indicated that it believes it can launch a yieldco next year. This has been an in vogue structure for several solar companies with long-term projects as a way of raising additional financing.
The market loved the results and the stock is very strong, up about 18% in midday trading to nearly $30, which is around where it started the year.
