Canadian Solar (CSIQ) Announces Fourth Quarter And Full Year 2024 Earnings Results

Canadian Solar Inc. (CSIQ) today announced its financial results for the latest quarter, showcasing a notable performance in earnings. The company reported a quarterly earnings per share (EPS) of $0.48, significantly surpassing the estimated EPS of -$0.1145, marking a beat by $0.5945. However, Canadian Solar’s revenue came in at $1.52 billion, slightly below the anticipated $1.57 billion, resulting in a miss by approximately $51.85 million. Despite the revenue shortfall, the strong EPS results highlight the company’s operational efficiency and cost management.

Key Highlights:

• Canadian Solar achieved its highest single quarter of e-STORAGE shipments at 2.2 GWh and expanded its e-STORAGE pipeline to a record 79 GWh with a $3.2 billion contracted backlog.
• CSI Solar shipped 31.1 GW of solar modules and 6.6 GWh of energy storage, marking a year-over-year increase of over 500%.
• Recurrent Energy brought 1.3 GWp of solar projects to commercial operation.
• The company generated $1.5 billion in revenue in Q4 2024, with a gross margin of 14.3%.
• Canadian Solar ended 2024 with $2.3 billion in cash, providing financial flexibility for strategic investments.
• The company expects total revenue for 2025 to be between $7.3 billion and $8.3 billion, with CSI Solar’s module shipments projected to be 30 GW to 35 GW.

Summary:

In 2024, Canadian Solar faced significant challenges due to intense competition and policy uncertainties in the solar industry. Despite these hurdles, the company managed to maintain stronger profitability through strategic adjustments in its modules business. Dr. Shawn Qu, Chairman and CEO, highlighted the transition the industry and Canadian Solar are undergoing, with a growing demand for energy storage driven by sectors like data centers and electric vehicles. The company remains committed to the U.S. market and is advancing its manufacturing expansion across facilities dedicated to solar modules, solar cells, and energy storage solutions. Yan Zhuang, President of CSI Solar, emphasized the importance of energy storage as a key profitability driver, with the company achieving record shipments and focusing on scaling volume and diversifying its global footprint.

Canadian Solar’s financial performance in the fourth quarter of 2024 was marked by a revenue of $1.5 billion and a gross margin of 14.3%. The company faced profitability challenges due to impairments, duties, and tariffs, but ended the year with a strong cash position of $2.3 billion. Ismael Guerrero, CEO of Recurrent Energy, noted the progress in transforming the business model, with significant construction starts and commercial operations in the U.S. Despite project sales delays impacting full-year performance, the company anticipates scaling recurring income as more projects reach commercial operation. Looking ahead, Canadian Solar expects its total revenue for 2025 to be between $7.3 billion and $8.3 billion, with continued focus on profitability and strategic growth in the energy storage segment.

Canadian Solar Inc. (CSIQ) has experienced a significant decline in its stock price over the past year, with a staggering 46.62% drop. This downward trend is consistent across various time frames, including a 35% decrease over six months and a 17.82% fall over the last three months. The company’s financial metrics paint a challenging picture, with a sky-high price-to-earnings ratio of 618.63, indicating that the stock may be overvalued relative to its earnings. Additionally, the revenue two-year compound annual growth rate (CAGR) is negative at -6.26%, suggesting a decline in sales over the period. The return on invested capital is also negative at -8.58%, reflecting inefficiencies in generating returns from its investments. Furthermore, the net profit margin is a mere 0.038%, highlighting the company’s struggle to convert revenue into profit. These fundamental weaknesses may be contributing to the bearish sentiment surrounding CSIQ’s stock performance.

Canadian Solar Inc., together with its subsidiaries, designs, develops, manufactures, and sells solar ingots, wafers, cells, modules, and other solar power and battery storage products in Asia, the Americas, Europe, and internationally. The company operates through two segments, Canadian Solar Inc. (CSI) Solar and Global Energy. The CSI Solar segment offers standard solar modules and battery storage solutions, as well as solar system kits that are a ready-to-install packages comprising inverters, racking systems, and other accessories; and engineering, procurement, and construction (EPC) services. The Global Energy segment engages in the development, construction, maintenance, and sale of solar and battery storage projects; operation of solar power plants; and sale of electricity. This segment also provides operation and maintenance (O&M) services, including monitoring, inspections, repair, and replacement of plant equipment; and site management and administrative support services for solar projects, as well as asset management services. As of January 31, 2021, this segment had a fleet of solar power plants in operation with an aggregate capacity of approximately 445 MWp. The company serves distributors, system integrators, project developers, and installers/EPC companies. It sells its products primarily under its Canadian Solar brand name; and on an OEM basis. The company was incorporated in 2001 and is headquartered in Guelph, Canada.