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Why Canadian Solar’s Stock Price Fell after Its 3Q17 Results

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Earnings announcement

Canadian Solar (CSIQ) reported its earnings results for 3Q17 before market hours on November 9, 2017. In this series, we’ll look at CSIQ’s 3Q17 results in detail, compare them with analyst estimates, and evaluate the factors that caused the deviations.

We’ll also discuss Canadian Solar’s revised capacity expansion plan.

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Canadian Solar’s stock reaction

Canadian Solar (CSIQ) posted muted operating performance for 3Q17. The company declared EPS (earnings per share) of $0.22, compared to the analyst consensus EPS estimate of $0.26. CSIQ reported consolidated revenues of ~$912.2 million against analysts’ expectations of ~$813.4 million.

However, CSIQ’s stock price fell nearly 10.8% during the intraday trading session on November 9, 2017. The company’s slim $13.3 million net income on its revenues of $912.0 million may have triggered the stock price’s decline.

Peer performance

The majority of the solar energy stocks have been performing well in 2017. CSIQ’s peer First Solar’s (FSLR) stock price has risen nearly 88% YTD (year-to-date). SunPower (SPWR) stock has risen about 22.8%.

On the day of CSIQ’s 3Q17 earnings release, First Solar (FSLR) and SunPower (SPWR) witnessed falls of nearly 2.0% and 1.8%, respectively, in their stock prices. JA Solar (JASO) stock fell 0.6% during intraday trading. Vivint Solar (VSLR) stock rose almost 1.3% during the same period.

The Guggenheim Solar ETF (TAN) fell almost 1.3% on November 9, 2017. This ETF tracks the broad-based solar market.

In the next part of this series, we’ll examine Canadian Solar’s shipments in 3Q17.

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