Producer of solar cells and panels,
Canadian Solar Inc.
) has completed the annual renewal of its 25-year product warranty
insurance policy through April 1, 2013. The policy covers Canadian
Solar modules for 25 years following warranty start date.
Earlier in 2010 Canadian Solar became one of the first companies in
the industry to offer enhanced product and performance warranty
backed by an immediately available and non-cancellable insurance
Canadian Solar specified that its product and performance
warranty insurance is underwritten by world leading insurance
companies based in North America and Europe with A.M. Best Rating
of "A" VIII or better. A.M. Best ratings are provided by A.M. Best
Company as the reference of an insurer's financial strength and
ability to meet ongoing obligations to policyholders. A.M. Best
Company is a worldwide insurance-rating and information agency.
The policy has been active since April 2010 and covers Canadian
Solar modules for 25 years following warranty start date. The
insurance coverage is based on Canadian Solar's standard quality
and performance warranty statements, which includes a 10-year
product workmanship warranty and a 25-year linear power output
In recent times, Canadian Solar booked positive growth in the
U.S., Europe, China and India. Moreover, its specialization at the
downstream total solutions business makes it a higher-margin
Canadian Solar plans to prudently manage manufacturing
utilization, inventory and mix levels, and operating expenses, as
demand levels fluctuate. It also expects to continue to explore
ways to increase manufacturing efficiency and lower processing and
consumable costs where possible. It expects shipments to be in the
range of 430MW to 450MW in the second quarter of 2012, with gross
margin expected to be between 8% and 10%. Despite the challenging
global financing environment that leads to customer demand
uncertainty, the company expects to ship approximately 1,800MW to
2,000MW of solar products in fiscal 2012.
However, in the near term, fortunes would be impacted by the
industry-wide oversupply glut leading to sharply falling Average
Selling Prices, tepid module demand in Europe, and rising
competition in the market. Given the industry-wide high inventory
level, we do not foresee any short-term improvement in the margins
of the company.
Canadian Solar Inc. is one of the world's largest solar
companies. As a leading vertically integrated provider of ingots,
wafers, solar cells, solar modules and other solar applications,
the company designs, manufactures and delivers solar products and
solar system solutions for on-grid and off-grid use to customers
worldwide. With operations in North America, Europe, Australia and
Asia, Canadian Solar provides premium quality, cost-effective and
environmentally-friendly solar solutions to support global,
sustainable development. The company presently retains a short-term
Zacks #3 Rank (Hold) that corresponds with our long-term Neutral
recommendation on the stock. The company competes with
First Solar Inc.
CANADIAN SOLAR (CSIQ): Free Stock Analysis
FIRST SOLAR INC (FSLR): Free Stock Analysis
SUNPOWER CORP-A (SPWR): Free Stock Analysis
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