Canadian Solar Earnings Nearly Double on Solar Plant Sales

Sequentially, the company’s net income rose from $55.12 million to $108.52 million, and year-over-year net income jumped 225%.

For the fourth quarter of 2014, the company expects to ship 810 to 860 megawatts of solar modules for total revenue in the range of $925 million to $975 million and gross margins of 17% to 19%. The revenue total is slightly below the consensus estimate of $977.43 million.

For the full 2014 fiscal year, Canadian Solar said it expected revenues of $2.93 billion to $2.98 billion, compared with the consensus estimate of $2.83 billion. Last year’s total revenues came in at $1.65 billion.

Canadian Solar’s outstanding third-quarter performance is partially attributable to its sale of five utility scale solar power plants for more than C$306 million (about $270 million). The five sales plus a better-than-expected average selling price per module combined with factories running near full capacity pushed gross margins to 22.9%.

Over the past 12 months, only one other solar stock has performed better than Canadian Solar — SunEdison Inc. (NYSE: SUNE), which is trading nearly 42% higher. Canadian Solar is trading about 10% higher, and the others are trading in the red. No other solar maker’s stock has performed better in the past three to six months than has Canadian Solar’s.

The company’s CEO said:

Our results for the third quarter exceeded our expectations on all financial and operating metrics, led by the strength of our utility-scale solar energy business, combined with a robust performance from our module business, which continues to benefit from our Tier-1 brand, global scale, stable average selling price and broad-based growth in demand. … We expect the global solar demand to continue its growth momentum in 2015. With our strong cash and balance sheet position, and our captive pipeline of late stage utility-scale projects totaling approximately 1.4 GW DC and our global module sale coverage, we have the advantage of operating with greater visibility.

Canadian Solar plans to add 500 megawatts of module capacity at its Chinese plants. The new capacity will come online in the first and second quarters of the year and bring the company’s total module capacity to 3,500 megawatts. The company also plans to bring its cell manufacturing capacity up to 1,900 megawatts by the end of the second quarter and to expand its wafer-making capacity to 400 megawatts during 2015.

Canadian Solar’s shares were up about 9.5% in premarket trading Wednesday, at $34.41 in a 52-week range of $21.38 to $44.50. Thomson Reuters had a consensus analyst price target of $43.25 before the results were announced.

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