Canadian Solar Raises Q3 Revenue Outlook; Stock Up - Quick Facts

(RTTNews) - Canadian Solar Inc. (CSIQ) raised its outlook for the third quarter of 2015 to reflect higher than expected solar demand in the quarter and the sale of 51% of the 200 MW Tranquillity solar power project in California by the Company's wholly owned subsidiary, Recurrent Energy, to Southern Power, a subsidiary of Southern Company (SO).

In the pre-market trade, CSIQ is currently trading at $22.22, up $1.54 or 7.45%.

The Company now expects its total revenue for the third quarter of 2015 to be in the range of $805 million to $815 million, compared to previous guidance which was in the range of $570 million to $620 million. Analysts polled by Thomson Reuters expect the company to report revenues of $616.09 million for the third-quarter. Analysts' estimates typically exclude special items.

For the third quarter of 2015, Canadian Solar now expects its total solar module shipments to be in the range of approximately 1.18 GW to 1.23 GW, compared to its previous guidance, which was in the range of 970 MW to 1.02 GW, including approximately 99 MW of shipments to the Company's utility-scale solar projects that will not be recognized as revenue in the third quarter of 2015.

Gross margin for the third quarter of 2015 is expected to be at or slightly above the high end of previous guidance, which was in the range of 12% to 14%, primarily reflecting stronger than expected average module selling price partially offset by the Tranquillity project sale, which is expected to be profitable but with lower average gross margin.

Separately, on October 19, 2015, Canadian Solar reached an agreement with LDK Solar Co., Ltd. ("LDK"), to settle a legal dispute related to a December 2012 arbitration award decision by the former Shanghai branch of the China International Economic and Trade Arbitration Commission. Under this agreement Canadian Solar will incur a cost of RMB132.7 million or $20.9 million and LDK will waive any rights and benefits in connection with the December 2012 arbitration award decision.

In addition, under this agreement Canadian Solar will purchase from LDK, approximately 64.3 million pieces of wafers at market prices over a three year period starting on December 11, 2015. This agreement has been reviewed and approved by the Jiangsu Suzhou Intermediate Court. The Company expects to incur a charge for this settlement in the third quarter of 2015.