Canadian Solar Drops After Saying Euro's Decline Cut First-Quarter Profit
Canadian Solar Inc., a manufacturer of solar power cells and modules, sank to a five-month low after saying depreciation of the euro against the U.S. dollar would result in a first-quarter charge of up to $20 million.
Canadian Solar fell $2.43, or 11 percent, to $18.90 as of 9:47 a.m. in Nasdaq Stock Market composite trading. A close at that price would be the lowest since Nov. 13. Shares of the Kitchener, Ontario-based company are down 34 percent this year.
“The euro depreciated dramatically during the quarter and we did not have adequate currency hedging to cover our euro exposure,” Arthur Chien, chief financial officer, said in a statement yesterday.
The euro declined 5.7 percent against the dollar in the quarter, from $1.4321 on Dec. 31 to $1.351 on March 31. The range was $1.3268 to $1.4579.
Daniel Ries, an analyst at Collins Stewart in New York, said the foreign-exchange loss will reduce first-quarter results to a loss of 1 cent a share, from an earlier estimate of a 37- cent profit.
“We recommend investors remain on the sidelines if they are not currently involved in the shares,” Ries, who has a “hold” rating on the shares, said in a note to clients.
Solar-module shipments during the quarter will be 189 to 191 megawatts, up from an earlier forecast of 180 to 190, Canadian Solar said. Gross margin will be in the range of 13 percent to 13.5 percent.
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