Canadian Solar (CSIQ): Investors Happy With New Guidance

Canadian Solar Inc. (NASDAQ: CSIQ)

Canadian Solar is having an incredible day in the market today after increasing guidance with regard to their third quarter. Today, we’ll talk about the increased guidance, how this is likely to turn Q3 earnings into a massive catalyst and what this means for CSIQ in Q4. So, let’s get right to it…

CSIQ Increases Q3 Guidance

Canadian Solar provided a pleasant surprise for investors today by increasing its guidance for the third quarter. Before today, it was expected that the company would generate revenue between $570 million and $620 million for the quarter. Analysts were expecting to see revenue in the high end of that range at $616.09 million. However, in today’s announcement, CSIQ stated that they are now expecting for revenue to come in between $805 and $815 million for the quarter, a sharp contrast from previous expectations. CSIQ also increased its guidance with regard to what the company expected to ship out for the third quarter. Previously, Canadian Solar expected for shipments to come between 970 MW and 1.02 GW. However, they are now expecting for shipments to come in with a total of between 1.18 GW and 1.23 GW.

The higher than expected solar demand is lending a hand to the company’s earnings which are expected to be announced on November 11th. During the announcement, Dr. Shawn Qu, CEO of CSIQ had the following to say…

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.”

How CSIQ Reacted In The Market

As investors, we know that any time a publicly traded company releases positive news, we can expect to see gains in the value of that company’s stock. That’s exactly what we’ve seen from CSIQ so far today. Currently (11:17), the stock is trading at $22.12 per share after a gain of $1.44 or 6.96%.

What We Can Expect To See Moving Forward

Before today, I was a bit concerned. With the declining prices in the energy sector, I wasn’t sure how demand for solar energy would stack up. However, based on the new guidance, I have a newly-found opinion of the stock. It is obvious that even while oil prices remain low, demand for solar is increasing. This is great news for CSIQ. With that said, I’m expecting for the Q3 earnings report to be an incredibly positive catalyst for the stock. As the CEO of the company mentioned with regard to the fourth quarter, CSIQ is entering the quarter in a great position – both with regard to demand and with regard to financial strength. All in all, I’m expecting to see great things out of the stock moving forward.

What Do You Think?

Where do you think CSIQ is headed and why? Let us know your opinion in the comments below!

[Image Courtesy of Canadian Solar]

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