Why Did Canadian Solar Stock Fall after 3Q16 Results?



Earnings announcement

Before market hours on November 21, 2016, Canadian Solar (CSIQ) announced its 3Q16 earnings results for the quarter ended September 30, 2016.

In this series, we’ll analyze the company’s 3Q16 results in detail, compare the results with analyst expectations, and analyze any factors that caused a deviation. We’ll also look at the company’s revised capacity expansion plan and then conclude the series with management’s guidance for fiscal 2016 and the outlook for the company.

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Canadian Solar’s stock reaction

Canadian Solar posted mixed earnings for 3Q16. It reported EPS (earnings per share) of $0.27 compared to the analyst consensus of $0.24.

However, the company had lower-than-anticipated 3Q16 revenue and a downward revision of fiscal 2016 shipments and US GAAP (generally accepted accounting principles) revenue guidance. All these factors caused the stock to fall nearly 9.0% during intraday trading on November 21, 2016.

Peer performances

On the day of Canadian Solar’s 3Q16 earnings release, peers JA Solar Holdings (JASO) and SunPower (SPWR) both fell nearly 3.0%. SunEdison (SUNEQ) fell almost 11.0%. First Solar (FSLR) and Yingli Green Energy Holding (YGE) rose nearly 1.0% and 2.0%, respectively, during the same period.

The Guggenheim Solar ETF (TAN) tracks the broad-based solar market. It fell almost 1.0% at the close of November 21, 2016. The SPDR S&P 500 ETF (SPY) closed at a new record high that day.

In the next part of this series, we’ll look at Canadian Solar’s shipments in 3Q16.


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