CSIQ - Canadian Solar looks set to rally after strong Q2

Canadian Solar ( NASDAQ: CSIQ ) +5.8% pre-market on Thursday after easily beating expectations for Q2 earnings as revenues rose 61% Y/Y and 85% Q/Q to $2.3B, and raising guidance for Q3 and FY 2022.

Q2 total module shipments recognized as revenues rose 37% Y/Y to 5.06 GW, including 126 MW shipped to the company's own utility-scale solar power projects.

Q2 gross profit more than doubled Y/Y and Q/Q to $371M, while Q2 gross margin improved to 16.0% from 14.5% in Q1, driven by higher module pricing, lower manufacturing costs from the depreciation of the renminbi vs. the U.S. dollar, and scale benefits from higher volume.

The company said it increased module shipments by nearly 40% Q/Q and battery storage solutions revenues by 2.8x Q/Q.

For Q3, Canadian Solar ( CSIQ ) sees revenues of $2B-$2.1B vs. $1.94B analyst consensus estimate, with gross margin of 16%-16.5% and total module shipments of 6.0-6.2 GW, including 140 MW to the company's own projects.

For the full year, the company forecasts revenues of $7.5B-$8B vs. $7.25B consensus and up from prior guidance of $7B-$7.5B, with volume targets for CSI Solar and Global Energy remaining unchanged from prior guidance of 20-22 GW total module shipments and 1.8-1.9 GWh battery storage shipments from CSI Solar, and total project sales of 2.1-2.6 GW from Global Energy.

Canadian Solar ( CSIQ ) shares have gained 25% YTD and 13% during the past year .

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