What happened 

Shares of solar panel manufacturer Canadian Solar (CSIQ -1.64%) jumped as much as 11.1% in early trading on Thursday after reporting fourth-quarter financial results. The solar energy stock lost a lot of those gains as the day went on and was up 3% at 1:15 p.m. EDT. 

So what

Solar panel shipments were a whopping 3.0 gigawatts in the quarter, and revenue grew 13.2% to $1.04 billion. Net income was down from $67.9 million a year ago to $6.7 million, or $0.11 per share, largely because of higher raw material prices. 

Solar farm in the middle of the desert.

Image source: Getty Images.

Another key metric that investors watch is gross margin, which was 13.6% in the quarter and higher than the guidance of 8% to 10%. But this is lower than margins in the high teens and 20s that we've seen over the last couple of years and shows the commodity pressure hitting solar manufacturing right now. 

Now what

Beating guidance was enough to push Canadian Solar's shares higher this morning, but the gains didn't last because the business is under some pressure. Management did say that the commodity pressure will likely continue, but we may see higher solar panel prices, which could help revenue and margins later in the year. The good news is that Canadian Solar is still making money in a difficult operating environment, which isn't something we have always been able to say for solar manufacturers.