October 17, 2011 / 12:07 PM / 7 years ago

UPDATE 1-Canadian Solar cuts Q3 gross margin forecast

* Sees gross margin at 2-5 pct vs prior view of 9-12 pct

* Reaffirms Q3 shipments forecast (Follows alerts)

Oct 17 (Reuters) - Solar panel maker Canadian Solar Inc cut its third-quarter gross margin forecast, hurt by weak average selling prices and lower demand earlier in the period.

The company now expects its gross margin to be 2-5 percent, compared with the previous outlook of 9-12 percent.

Steep declines in the prices of the renewable energy systems have pressured margins at Canadian Solar, which has been one of the fastest-growing companies in the solar sector in recent years.

Subsidy cuts in Europe and an oversupply of panels have sent prices into a tailspin and squeezed margins across the nascent industry, prompting several key manufacturers such as Suntech Power Holdings Co Ltd , SunPower Corp and Trina Solar Ltd to pare their profit forecasts.

However, the company reaffirmed its prior shipments forecast of 350 MW-360 MW.

The Ontario, Canada-based company’s shares closed at $3.79 on Nasdaq.

(Reporting by Sumit Jha in Bangalore; Editing by Sriraj Kalluvila)

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