Why Canadian solar stocks fell this week

The late summer sun might be shining in many parts of the world, but it did not illuminate Canadian Solar (CSIQ -15.69%) stock in the last few days. After the company released a new set of quarterly results, many investors headed for the exit doors. As a result, Canadian Solar’s share price is down nearly 17% year-to-date as of Friday morning, according to data compiled by S&P Global Market Intelligence.

Erosion from above and below

Before the market opened on Thursday, Canadian Solar released its second quarter earnings report. This showed that the company earned nearly $1.64 billion in revenue for the period. This was down significantly from $2.36 billion in the same quarter last year. Net income eroded much more dramatically, falling to $3.8 million ($0.02 per share) from nearly $170 million in the second quarter of 2023.

Although the solar company beat analysts’ consensus estimate for revenue ($1.59 billion), it was well below expectations for profitability. Collectively, experts following Canadian Solar were anticipating $0.20 per share for net income.

Canadian Solar explained that the sharp difference between this second quarter and last year is largely due to a notable drop in solar module prices.

A lack of revenue guidance

In its earnings release, Canadian Solar provided revenue guidance for both the current quarter (third) and full-year 2024. For the latter period, a top line of $6.5 billion to $7.5 billion is expected. Like trailing quarterly profitability, however, this range is below the average analyst projection (in this case, $7.66 billion).