The results mirror a wider trend seen in the North American solar equipment industry in 2024.
Renewable energy stock Canadian Solar (NASDAQ:CSIQ), already cut in half since the beginning of 2024, continued to decline on Thursday morning as the solar power and battery energy storage equipment manufacturer delivered disappointing quarterly revenue.
Amid fears of a difficult solar market backdrop, Canadian Solar generated third-quarter 2024 sales of $1.5 billion, falling short of the analysts’ consensus estimate of $1.69 billion. Consequently, CSIQ stock slumped 6% in premarket trading on Thursday after having already shed 4% on Wednesday.
The results mirror a wider trend seen in the North American solar equipment industry in 2024, with shares of market leaders like SolarEdge Technologies (NASDAQ:SEDG) and Sunrun (NASDAQ:RUN) down significantly.
If solar investors counted on Canadian Solar to save the day with Street-beating quarterly results, they were undoubtedly disappointed this week. The company posted 16.4% gross margin for 2024’s third quarter, above Canadian Solar’s prior guidance of 14% to 16%, but this wasn’t enough to quell the shareholders’ fears.
For Q3 2024, Canadian Solar posted sales of $1.5 billion, whereas Wall Street had anticipated $1.69 billion in sales.
Meanwhile, the company’s net loss of $0.31 per share was better than the analysts’ consensus forecast of a loss of $0.44 per share. However, this result was still a bitter pill to swallow after Canadian Solar had reported net income of $0.02 per share in the prior quarter and net income of $0.32 per share in the year-earlier quarter.
Ismael Guerrero, CEO of Canadian Solar subsidiary Recurrent Energy, reminded Canadian Solar investors that the company had scored a $500 million investment from financial behemoth BlackRock (NYSE:BLK).
Evidently, this capital infusion and vote of confidence from BlackRock wasn’t enough to prevent a continued sell-off in CSIQ shares. Even as Canadian Solar firms up its balance sheet with funds from BlackRock, stock traders are clearly concerned about the incoming U.S. presidential administration’s potential shift away from clean energy initiatives.
Even before the changing of the guard in the White House, Canadian Solar had to navigate a challenging solar industry landscape in 2024. According to the company, Canadian Solar’s sequential sales decline “reflects lower third-party battery energy storage solutions sales, a decline in average selling price (“ASP”) and lower project sales”.
Perhaps this can be summed up by simply acknowledging that certain solar market sub-segments are seeing lower total sales and lower prices per sale.
Hence, given the changes in the U.S. government that will occur in January, the burden of proof falls squarely upon Canadian Solar’s shoulders as the company operates at a net earnings loss amid an uncertain North American solar industry landscape.