Net revenue for the fourth quarter was $294.8 million, compared to $326.0 million in the third quarter of 2012. Revenue derived from the Company’s total solutions business represented 12.8 percent of total revenue, compared to 21.5 percent in the third quarter of 2012.
Solar module shipments during the fiscal 2012 were 1,543 MW, up 16.6 percent from 1,323 MW in fiscal year 2011.
Net revenue was $1.3 billion, compared to $1.9 billion in fiscal year 2011. Gross margin was of 7.0 percent, compared to 9.6 percent in fiscal year 2011.
By geography, in the fourth quarter of 2012, Canadian Solar’s sales to European markets represented 40.6 percent of net revenue, sales to North America represented 20.0 percent of net revenue, and sales to Asia and all other markets represented 39.4 percent of net revenue, compared to 47.9 percent, 24.9 percent and 27.2 percent, respectively, in the third quarter of 2012 and 46.5 percent, 26.9 percent and 26.6 percent, respectively, in the fourth quarter of 2011.
Gross profit in the fourth quarter of 2012 was $14.9 million, compared to $7.3 million in the third quarter of 2012 and $41.4 million in the fourth quarter of 2011. The sequential quarterly increase in gross profit was primarily due to higher shipment volume and a continued reduction in manufacturing costs.
The year-over-year decline in gross profit was primarily due to a lower average selling price partially offset by lower manufacturing costs.
Total operating expenses were $106.4 million in the fourth quarter of 2012, compared to $41.8 million in the third quarter of 2012 and$62.9 million in the fourth quarter of 2011.
Selling expenses were $25.0 million in the fourth quarter of 2012, up 16.8 percent from $21.4 million in the third quarter of 2012 and up 18.4 percent from $21.1 million in the fourth quarter of 2011. The sequential increase in selling expenses was primarily due to higher shipment volume as well as an increase in headcount required to expand the Company’s project development team targeting opportunities in Japan, China, the U.S. and Canada. The year-over-year increase in selling expenses was due to increases in transportation unit costs, as well as increases in sales and project development headcount and related salary expenses.
Research and development expenses were $3.1 million in the fourth quarter of 2012, down 7.5 percent from $3.4 million in the third quarter of 2012 and down 37.6 percent from $5.0 million in the fourth quarter of 2011. The year-over-year decline in research and development expenses was due to the successful completion of several key research and development projects at the end of 2011.
Shawn Qu, chairman and chief executive officer of Canadian Solar, remarked: “2012 was a difficult year for the entire solar industry. Despite the headwinds, we maintained our practice of balancing the desire to expand with the need for prudent business management and cost control.”
Canadian Solar has fared better than most of our competitors, increased the market share and achieved one of the lowest production costs among their peers, Qu added. The company also achieved a more evenly balanced geographic distribution.
“Moving forward, we are uniquely positioned as we do not have to carry the baggage of underperforming polysilicon manufacturing assets and the liability of large long-term supply contracts that some of our competitors have,” Qu added. “Our light manufacturing strategy combined with targeted investments in our downstream total solution business puts us in a good competitive position to emerge from the current industry cycle as a stronger leader.”