Please ensure Javascript is enabled for purposes of website accessibility

Why Canadian Solar's Shares Jumped 11.1% Today

By Travis Hoium - Mar 18, 2021 at 1:47PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This solar stock is making a turnaround today.

What happened 

Shares of solar panel manufacturer Canadian Solar (CSIQ 6.44%) 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. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Canadian Solar Inc. Stock Quote
Canadian Solar Inc.
$25.79 (6.44%) $1.56

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.