March 17, 2009 / 12:04 PM / 9 years ago

UPDATE 2-Canadian Solar shares sink on qtrly loss, weak rev view

* Q4 shr loss wider-than-expected, Rev down 43 pct

* Sees Q1 revenue down sequentially

* Sees better margins in Q1 sequentially

* Backs 2009 shipment view

* Shrs down 16 pct (Recasts; adds background, conference call details, share movement)

March 17 (Reuters) - Canadian Solar Inc CSIQ.O posted a wider-than-expected quarterly loss, hurt by rapid price declines and shrinking funding for solar projects, and it said revenue would be lower this quarter than last quarter.

Shares of the solar-cell maker fell as much as 16 percent Tuesday morning, making it one of the largest percentage losers on Nasdaq. The stock is down more than 90 percent from a peak hit last June, mirroring other solar stocks which have also been in free fall since the start of the year.

A pullback in solar subsidies in Germany and Spain, a dearth of credit for renewable energy projects and a strengthening U.S. dollar against the euro has sent prices of solar products tumbling.

As a result, many solar companies have been forced to pare back expansion plans and revise revenue and earnings estimates.

U.S. solar company Energy Conversion Devices ENER.O on Monday slashed its revenue view for the quarter and said it would slow expansion plans. The company also withdrew its forecast for 2009 and said it would consolidate some production and cut about 70 jobs. [ID:nN16394183]

In a conference call with analysts, Canadian Solar Chief Executive Shawn Qu said he expects megawatts delivered in the first quarter to be flat compared with the fourth quarter. “With lower average selling prices, revenue in the first quarter will be lower than fourth-quarter revenue.”

The company, which is incorporated in Canada and has manufacturing plants in China, shipped 19.6 Megawatts (MW) in the fourth quarter.

Qu, however, expects first-quarter gross margins to improve over the negative margins recorded in the fourth quarter.

The company, whose results were also hurt by unfavourable weather, said almost all of its German customers placed orders in the past two weeks, a sign that the German market was bouncing back after a harsh winter.

However, Canadian Solar currently expects to realize about two-thirds of its first-quarter sales outside Germany and Spain, the two traditional markets in 2008.

The company said it was sticking with its 2009 shipment outlook, which was cut last month to between 300 MW and 350 MW from a range of 500 MW to 550 MW.

It expects 2009 revenue between $600 million and $800 million, while analysts are looking for revenue of $644.9 million for the period.

QUARTERLY RESULTS DISAPPOINT

For the latest fourth quarter, the company posted a loss of $1.42 a share. Revenue fell 43 percent to $73 million.

A reduction in the value of the company’s inventory led to a charge of $23.3 million for the quarter.

Excluding items, Canadian Solar reported a loss of $1.39 a share, much wider than analysts’ average view of a loss of 26 cents a share.

Adjusted gross margins came in at negative 34.4 percent for the quarter. The company expects gross margins to improve in the second quarter and achieve its guidance margins in the second half of the year, once older inventory has been used and as it benefits from lower raw materials pricing.

For the alerts, double click [ID:nWNAB4757] (Reporting by Adveith Nair in Bangalore; Editing by Anil D‘Silva;)

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