Canadian Solar sees lower shipments as European sales slump

Thu Aug 8, 2013 9:43am EDT
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(Reuters) - Canadian Solar Inc (CSIQ.O: Quote) forecast lower shipments and margins for the current quarter as its market share shrinks in the European Union, the biggest solar market where the EU plans to cap imports of cheap solar panels made in China.

Shares of the company, most of whose manufacturing operations are in China, were down 7 percent at $13.26 on the Nasdaq on Wednesday.

Canadian Solar said it expects to ship between 410 megawatts (MW) and 430 MW of solar panels in the third quarter, lower than the 455 MW it shipped in the second.

The company forecast gross margin of 10-12 percent for the third quarter, lower than nearly 13 percent in second quarter.

Canadian Solar's sales to Europe slumped by about 83 percent in the quarter ended June, accounting for less than 11 percent of its second-quarter revenue of $380.4 million. Europe accounted for nearly 70 percent of the company's revenue a year ago.

The company said it was adopting a "conservative approach" in Europe. It does not expect any growth in shipments to Europe in the third quarter.

"It does not surprise me in the least that they would guide to a slower third quarter as compared to second quarter," said Raymond James analyst Pavel Molchanov.

"Second quarter had considerable 'pre-buying' in Europe ahead of the feared European tariff that could have pushed Chinese module prices in Europe up almost 50 percent," he said.

Canadian Solar's rivals Trina Solar Ltd TSL.N and Yingli Green Energy Holding (YGE.N: Quote) on Thursday said they expect second-quarter shipments and gross margins to be higher than their forecasts on the jump in sales in Europe.   Continued...