(Reuters) - Canadian Solar Inc (CSIQ.O) forecast weaker-than-expected revenue for the first quarter and blamed severe winter in North America for delays in construction of power plants, sending its shares down 10 percent.
Canadian Solar, which is pushing into the high-margin business of building solar power plants, joins rivals Trina Solar Ltd TSL.N and JinkoSolar Holding Co Ltd (JKS.N) in warning of a drop in current-quarter shipments from the fourth.
The company, which reported its second straight quarterly profit after nine quarter of losses, said about $100 million in revenue from some of its utility-scale projects in Canada was delayed due to the severe winter.
Canadian Solar said it expects to recognize this revenue in the second and third quarters of 2014.
The company forecast shipments of 470-490 megawatts (MW) of solar panels in the first quarter, lower than the 621 MW it shipped in the fourth.
The first quarter is usually a weak quarter for solar companies as winter weather hampers installation of panels.
Canadian Solar said shipments slipped in the current quarter due to seasonal weakness in China, longer shipping time to Japan and the United States and a fall in output due to the Chinese New Year holiday.
The company forecast first-quarter revenue of $415 million to $430 million, below analysts’ average expectation of $517.8 million, according to Thomson Reuters I/B/E/S.
Demand in China was normalizing in the first quarter after a year-end rush, Chief Executive Shawn Qu said on a conference call with analysts.
“The panel shipment number looks low in the first quarter but I don’t think that reflects any weakness in the market,” Qu said on the call.
Rising demand from China and Japan is helping solar companies emerge from a four-year slump caused by weak panel prices.
The Chinese market accounted for 43 percent of fourth-quarter shipments, up from 10 percent a year earlier, Canadian Solar said.
The company expects to ship 2.5-2.7 gigawatts (GW) of solar panels in 2014, compared with 1.9 GW last year.
Canadian Solar said it is ramping up its annual panel making capacity to 3 GW from the second quarter. The company has panel production capacity of 2.4 GW, according to its website.
Canadian Solar said its full-year shipment target includes 400-500 MW from project sales. The company also expects to build and hold up to an additional 250 MW of projects during 2014.
Like rivals, the company is looking to spin off some solar power plants into separate dividend-paying entities, known as yield cos, to raise money to build new plants.
However, Chief Financial Officer Michael Potter said on the call that the company would not have sufficient project assets to drop into a yield co until the end of this year or the beginning of next year.
Canadian Solar had about 1.3 GW of late stage utility-scale solar projects in its pipeline at the end of January.
Net income attributable to Canadian Solar was $20.9 million, or 39 cents per share, for the fourth quarter, compared with net loss of $105 million, or $2.43 per share, a year earlier.
The company’s revenue jumped 76 percent to $519.5 million.
Canadian Solar shares were down nearly 9 percent at $39.88 in morning trade on the Nasdaq. The stock has risen 38 percent since the beginning of 2014.
Reporting by Garima Goel and Swetha Gopinath in Bangalore; Editing by Kirti Pandey and Sriraj Kalluvila