Canadian Solar Inc. (NASDAQ:CSIQ) saw its stock tumble more than 10% in pre-market trading Thursday after reporting second-quarter results that fell far short of Wall Street expectations, despite posting stronger-than-expected gross margins.
The solar energy and renewable technology firm disclosed an adjusted net loss of $0.53 per share, missing analyst consensus by a wide margin of $2.01 compared with the expected profit of $1.48 per share. Revenue for the quarter totaled $1.7 billion, below projections of $1.93 billion. The company said the revenue miss was largely due to storage shipments and certain project sales being pushed into the latter half of the year.
Even with the revenue shortfall, Canadian Solar managed to beat profitability forecasts on the margin front. The company reported a 29.8% gross margin, surpassing its own guidance of 23% to 25%. Module shipments reached 7.9 GW, landing within the company’s forecast range of 7.5 GW to 8.0 GW. This figure marked a 14% increase compared with the previous quarter but was down 4% from the same period last year.
“We delivered a second quarter largely in line with expectations. While revenue came in below guidance due to storage shipments shifting to the second half and delays in certain project sales, gross margin exceeded expectations,” said Dr. Shawn Qu, Chairman and CEO of Canadian Solar.
Looking ahead, management struck a cautious tone. For the third quarter, Canadian Solar expects revenue between $1.3 billion and $1.5 billion, with gross margins projected to ease to between 14% and 16%. For the full year 2025, the company guided total revenue in the range of $5.6 billion to $6.3 billion.
“We expect third quarter margins to moderate as difficult market conditions persist, and storage profitability reflects more recent orders at normalized levels,” Dr. Qu added. “The second half will remain challenging, with rising solar supply chain prices and ongoing trade uncertainties.”
The company ended the quarter with a healthy balance sheet, holding $2.3 billion in cash as of June 30. Operating cash inflow was reported at $189 million, while total debt, including financing liabilities, stood at $6.3 billion.
Canadian Solar’s e-STORAGE unit maintained momentum, with a contracted backlog valued at $3 billion, including long-term service agreements. Its global development pipeline now encompasses approximately 27 GWp of solar projects and 80 GWh of battery energy storage projects.
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