Canadian Solar (Canadian Solar (CSIQ)) reported first-quarter results on Thursday that topped Wall Street estimates on both revenue and earnings, driven by stronger-than-expected energy storage shipments and improved margins. But the market wasn't impressed—shares plunged more than 15% after the company issued a second-quarter outlook that fell far short of analyst expectations.

Revenue totaled $1.077 billion, down 10% year over year but above the analyst estimate of $950.382 million and at the high end of the company's guidance range. The company reported a GAAP net loss attributable to shareholders of $32 million, or 71 cents per share, compared with a loss of $34 million, or 69 cents per share, a year earlier. The EPS result beat the analyst estimate of a loss of 73 cents per share.

The company also announced the appointment of Colin Parkin as chief executive officer, effective May 14, succeeding founder Shawn Qu, who transitioned to executive chairman and chief technology officer.

Margins Improve As Shipments Beat Guidance

Gross margin improved to 25.1% from 11.7% a year earlier, supported by a $93 million IEEPA tariff refund benefit. That's a nice temporary boost, but the company warned that margins would compress in the second quarter.

Solar module shipments totaled 2.5 GW, exceeding guidance of 2.2 GW to 2.4 GW, while battery energy storage shipments reached 2.1 GWh, above guidance of 1.7 GWh to 1.9 GWh. Solar module shipments declined 64% year over year, while storage shipments rose 142%.

U.S. Manufacturing Expansion Continues

Canadian Solar said its 5 GWp Mesquite, Texas solar module facility is expected to expand to 10 GWp capacity in the second half of 2026. The company also began trial production at its HJT solar cell plant in Jeffersonville, Indiana, with commercial operations targeted for July 2026.

Storage Backlog And Development Pipeline Expand

The company's e-STORAGE segment had contracted backlog, including long-term service agreements, of $3.5 billion as of May 8. Recurrent Energy's solar project pipeline stood at 23.7 GWp, and its battery storage pipeline totaled 80.6 GWh as of March 31.

Operating cash outflow was $209 million in the quarter. Canadian Solar ended the period with $1.9 billion in cash and total debt of $6.8 billion.

Q2 Outlook Trails Estimates

For the second quarter, Canadian Solar forecast revenue of $1 billion to $1.2 billion, well below the analyst estimate of $1.520 billion. The company expects gross margin of 13% to 15%, solar module shipments of 3.1 GW to 3.3 GW, and battery energy storage shipments of 2.8 GWh to 3.2 GWh.

Management cited ongoing solar margin pressure, lithium carbonate price fluctuations, policy uncertainty, and geopolitical volatility as headwinds. That's a lot of headwinds, and the market clearly thinks the tariff windfall won't be enough to keep the stock afloat.

CSIQ Price Action: Canadian Solar shares were down 15.21% at $17.00 at the time of publication on Thursday.