Canadian Solar (CSIQ) Rises 16% on Earnings Beat

  • Canadian Solar (CSIQ) stock is up about 16% in afternoon trading today.
  • The photovoltaic (PV) solar module manufacturer delivered outstanding second-quarter results.
  • CSIQ stock is also responding well to a full-year 2022 sales guidance upgrade.
A Canadian Solar (CSIQ) display booth at a convention in Bangkok, Thailand.
Source: Shutter B Photo / Shutterstock.com

Photovoltaic (PV) module manufacturer Canadian Solar (NASDAQ:CSIQ) delivered an outstanding performance for its second-quarter earnings report. Beating consensus estimates for the top and bottom lines, management also upgraded full-year sales guidance. Now, CSIQ stock is shooting up 16% on the news, with momentum remaining strong heading into the afternoon.

On the profitability front, Canadian Solar delivered earnings of $1.07 per share, very favorable against the year-ago posting of 18 cents per share. Covering analysts carried a consensus target of 70 cents per share heading into the disclosure, representing an earnings surprise of nearly 53%. Over the last four quarters, the company has beaten consensus estimates for earnings per share (EPS) three times.

For the top line, the solar specialist posted revenue of $2.31 billion. This result beat out the year-ago quarter’s tally of $1.43 billion. Better yet, sales beat the consensus Wall Street estimate by 3.71%. Per Zacks Equity Research, the company has beaten out sales targets once in the last four quarters.

That said, management’s decision to upgrade guidance for 2022 is likely catching the most attention today. In terms of sales, Canadian Solar projects a top-line stat in the range of $7.5 billion to $8 billion. This is an increase from the previous range of $7 billion to $7.5 billion.

CSIQ Stock Storms Higher

Naturally, both investors and insiders alike are shining a positive spotlight on CSIQ stock in response to the report. For investors, the rally has helped catapult shares to a year-to-date (YTD) performance of around 46%. Insiders are also robustly optimistic for the future. Chairman and CEO Shawn Qu had the following to say:

“We are off to a strong first half for 2022, and expect continued solar module volume growth through the remainder of the year as we ramp up capacity towards 2023 volume growth targets.”

Qu added more compelling details to the strong Q2 report:

“Sequentially, we grew our module shipments by nearly 40% and battery storage solutions revenues by 2.8 times, while significantly expanding our profitability and completing a large volume of project sales. Our capacity growth strategy is also well on track, which we expanded per our recent announcement to invest in our own polysilicon capacity in a region rich in renewable energy resources.”

Moving forward, CSIQ stock bulls will be looking toward the all-time high set in January of last year. While the current pricing dynamics remain a bit off from that peak, the green energy sector seems to have come to life in recent weeks.

Why It Matters

There’s one more thing to note from the Q2 report. CEO Shawn Qu added, “We are also excited to see the Inflation Reduction Act, or IRA, in the U.S. coming into effect. We believe it will drive a big acceleration in demand for clean energy, especially for solar energy and battery storage.”

Specifically, Qu is referencing President Joe Biden and his administration’s major legislative breakthrough this month. Because the proposal earmarks approximately $369 billion for climate change provisions, the IRA bodes very well for CSIQ stock moving forward.

On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.


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