Canadian Solar cuts shipment forecast, bets on power plants
(Reuters) - Canadian Solar Inc (CSIQ.O: Quote) lowered its shipment forecast for the year as solar panel prices remained depressed and said it was looking to its lucrative power plants business to drive growth.
The company's shares fell 4 percent to $2.20 on the Nasdaq.
Solar companies have been hit by global oversupply that has erased margins across the industry. Companies such as First Solar Inc (FSLR.O: Quote) and SunPower Corp SPWR.O are trying to improve margins by developing large power plants.
Canadian Solar, which pins its hopes on the U.S. power plants business, has orders to build projects of up to 130 megawatt (MW) in 2013.
The company expects to generate more than half of its 2013 revenue from its total solutions business, which covers everything from the making of solar cells to the installation of plants, Chief Executive Shawn Qu said on a call with analysts.
The share of the total solutions business to the company's revenue rose to 21.5 percent in the third quarter from 5.5 percent in the second quarter.
The company's project pipeline was about 243 MW at the end of the third quarter, with 5 MW expected to be built in the fourth quarter.
"The company does appear to be focusing on a shift downstream ... but we've heard similar comments from many module manufacturers, and ... it's easier said than done," said Raymond James analyst Alex Morris.
First Solar and SunPower reported stronger-than-expected quarterly results earlier this month as their project businesses rose. Continued...