Producer of solar cells and panels, Canadian Solar Inc. ( CSIQ ) 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 policy.
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 performance guarantee.
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 business.
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. ( FSLR ) and SunPower Corporation ( SPWR ).
CANADIAN SOLAR (CSIQ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
