Canadian Solar Inc. (CSIQ:US), the best-performing solar manufacturer this year, reported its first quarterly profit in more than two years as sales of power plants surged.
Net income for the third quarter was $27.7 million, or 56 cents a share, compared with a loss of $43.7 million, or $1.01 a share, a year earlier, the Guelph, Ontario-based company said in a statement today. Revenue increased 29 percent to $490.9 million, with 41 percent coming from sales of solar farms.
The company is focusing its efforts on selling power plants, which are more profitable than photovoltaic panels. That’s the same strategy used by First Solar Inc. (FSLR:US), the only profitable company in the past year in the Bloomberg Industries Global Large Solar Energy Index of 15 suppliers.
“Our success has been mainly driven” by the company’s large-scale project development business, Chief Executive Officer and Chairman Shawn Qu said today on a conference call with analysts. “We are making major progress in our business transformation from a module manufacturer into a one-stop shop and provider of solar-power solutions.”
Revenue from selling solar farms accounted for 26 percent of the company’s total in the second quarter and 22 percent in the third quarter of 2012.
Canadian Solar has more than 1 gigawatt of future solar farms in its pipeline. In addition, the company’s “soft pipeline, of early-stage projects, exceeds 3 gigawatts,” Qu said on the call. “This extends the visibility into our business beyond the next four to five years.”
Canadian Solar gained 13 percent to $32 at the close in New York. It has increased more than ninefold this year, the most on the Global Large Solar Index. It hasn’t reported a profit (CSIQ:US) since the second quarter of 2011.
Large solar manufacturers are returning to profit, helped by a surge in demand from China and Japan. Increased orders have also pushed up photovoltaic panel prices, widening profit margins.
Canadian, which manufactures panels in China, shipped 478 megawatts in the third quarter and expects to ship 480 megawatts to 500 megawatts in the current quarter. It expects total 2013 shipments of 1.75 gigawatts to 1.77 gigawatts, compared with a previous forecast of 1.6 gigawatts to 1.8 gigawatts.
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