Canadian Solar (CSIQ) is set to report Q4 earnings tomorrow before the market opens with a conference call to follow at 8am ET.  

Current Consensus stands at EPS of $0.73 on Revenue of $1.029 bln.

CSIQ is considered to be one of the top Chinese solar players in the market. CSIQ has been a volatile name in the past and has seen aggressive selling in reaction to its last two earnings report. A positive pre-announcement on February 16 "should" take some of the earnings reaction out of play. 

February 26 Pre-announcement

  • For the fourth quarter of 2015, Canadian Solar now expects its total solar module shipments to be in the range of approximately 1,350 MW to 1,400 MW, compared to its previous guidance, which was in the range of 1,300 MW to 1,350 MW.
  • Canadian Solar sees Q4 revs of $1.02-1.07 bln (Prior Guidance $930-980 mln) vs then-$951.21 mln Capital IQ Consensus Estimate.
  • Q4 Gross margin is expected to be above the high end of previous guidance, which was in the range of 13% to 15%.

Previous Reactions

  • Q2 report- A $0.02 beat on the bottom line and an approximate 4% beat on the top but a fall off y/y revenue growth to 2% from 84% in Q1 was concerning. The report came on August 18 which followed the yuan devaluation and China stock market sell off. So the stock got hammered and fell to a 52-week low of $14.16 just four days later. Macro factors were at play but there was also some company-specific growth concerns.
  • Q3 Report- Co had a nice 24 cent beat on the bottom line and again outpaced revenue by approximately 5%. This resulted in a pop in the stock to $24.80 but it would quickly reverse and give up those gains. Revenue declined 7% y/y and again played a factor in the stock price. Shares then slipped to $20 and eventually held there which also corresponded with the 50 sma at the time.

Q3 Recap

  • CSIQ reported Q3 (Sep) earnings of $0.53 per share, $0.24 better than the Consensus of $0.29. Revenues fell 7.1% year/year to $849.8 mln vs the $811.26 mln Consensus.
    • Total solar module shipments were 1,198 MW, of which 1,150 MW were recognized in revenue, compared to 809 MW recognized in revenue in the second quarter of 2015.
  • The company issued upside guidance for Q4 (Adjusted higher on 2/26), seeing Q4 revs of $930-980 mln vs. $806.27 mln Consensus Estimate.
  • CSIQ projected total module shipments in the range of approximately 1,300 MW to 1,350 MW, including approximately 170 MW of shipments to the Company's utility-scale solar projects that may not be recognized in the fourth quarter 2015 revenue.

TECHNICAL PERSPECTIVE:

The stock is in the midst of a recent rejection of its 200 sma (currently $23.45) on March 3. It is attempting to stabilize at its 50-sma ($21.45) ahead of its report. CSIQ promises to be one of the more volatile names tomorrow.

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