Benzinga | Aug 12, 2021 12:11PM EDT

Canadian Solar Q3 Outlook Lags Consensus

* Canadian Solar Inc (NASDAQ: CSIQ) reported second-quarter FY21 revenue growth of 105% year-on-year to $1.43 billion at par with the analyst consensus.

* An increase in module shipments and average selling price (ASP), growth in beyond-module sales, and a higher revenue contribution from battery storage shipments drove the Q/Q growth of 31%.

* Total module shipments increased 26% Y/Y to 3.66 GW at the top end of 3.5 GW - 3.7 GW guidance.

* Margin: The gross margin contracted 830 bps to 12.9%, exceeding thea company guidance of 9.5% - 10.5%

* CSI Solar's gross margin declined 910 bps to 13.1%. Global Energy's gross margin reduced 610 bps to 4.2%.

* EPS of $0.18 beat the analyst consensus loss of $(0.30).

* Canadian Solar used $61 million in operating cash flow and held $1.3 billion in cash and equivalents.

* Canadian Solar is likely to benefit from demand for its solar and battery storage projects driven by the low cost of capital market players. It has a global solar project pipeline of 22 GW and a global battery storage project pipeline of 19 GWh.

* Outlook: Canadian Solar sees Q3 revenue between $1.2 billion - $1.4 billion below the analyst consensus of $1.62 billion. The company expects total module shipments between 3.8 GW - 4.0 GW. It considers a gross margin between 14% - 16%.

* Canadian Solar reiterated FY21 revenue between $5.6 billion - $6.0 billion compared to the analyst consensus of $5.9 billion. The company lowered the total module shipment guidance from 18 GW - 20 GW to 16 GW - 17 GW.

* Price Action: CSIQ shares traded lower by 0.05% at $41.46 in the premarket session on the last check Thursday.