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Is Canadian Solar (CSIQ) Set to Disappoint in Q1 Earnings?
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Ontario, Canada-based Canadian Solar Inc. (CSIQ - Free Report) is set to report first-quarter 2017 financial results on Jun 6, before the market opens.
Last quarter, the company posted a negative earnings surprise of 17.24%. However, the company surpassed the Zacks Consensus Estimate in two of the last four quarters, with an average beat of 59.35%.
Let’s see how things are shaping up at the company prior to this announcement.
Factors at Play
For first-quarter 2017, the company announced its expectation for total module shipment in the range of 1.15–1.2 gigawatts (“GW”). This includes almost 120 megawatts (“MW”) of shipments to its own utility-scale solar project. Revenues are projected in the band of $570–$590 million with gross margin of 13–15%. Moreover, according to management, the module average selling price (“ASP”), which has been trending lower during the fourth quarter compared to earlier levels, is expected to continue in the first quarter as well.
In Feb 2017, Canadian Solar completed the sale of three utility-scale solar farms for over $195.32 million. Proceeds from this sale-out are expected to boost the company’s first-quarter earnings growth.
As stated during its fourth-quarter earnings call, Canadian Solar is focusing on developing solar power projects, primarily for sale to third parties with the goal of recycling equity and reinvesting in development of new projects. Depending on the timing of these project sales, first-quarter revenues may or may not exceed the guidance range.
However, significant anti-dumping (AD) and countervailing duty (CD), as a result of the preliminary annual review ruling by the U.S. Department of Commerce as well as lower module average selling price, are expected to impact Canadian Solar’s gross margin growth.
For the first quarter, the Zacks Consensus Estimate for earnings is a penny, reflecting a decline of 96.2% on revenues of $579.6 million, which implies a 19.7% year-over-year drop.
Our proven model does not conclusively show that Canadian Solar is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.
Zacks ESP: Canadian Solar has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a penny. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Canadian Solar carries a Zacks Rank #5 (Strong Sell).
We caution against stocks with a Zacks Rank #4 (Sell) or 5 going into the earnings announcement, especially if the company is seeing negative estimate revisions.
Recent Peer Releases
First Solar Inc. (FSLR - Free Report) reported first-quarter 2017 earnings of 25 cents a share. The Zacks Consensus Estimate was pegged at a loss of 13 cents. The reported number declined 84.9% from the prior-year figure of $1.66. The company carries a Zacks Rank #3.
SunPower Corp. (SPWR - Free Report) reported first-quarter 2017 loss of 42 cents per share, narrower than the Zacks Consensus Estimate of a loss of 66 cents. In the year-ago period, the company had posted loss of 42 cents. SunPower has a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.
JA Solar Holdings Co., Ltd. posted first-quarter 2017 adjusted earnings of 3 cents per diluted American Depositary Share (ADS). The Zacks Consensus Estimate was pegged at a loss of 2 cents. Earnings declined 91.2% from 34 cents in the year-ago period. The company has a Zacks Rank #4.
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Image: Bigstock
Is Canadian Solar (CSIQ) Set to Disappoint in Q1 Earnings?
Ontario, Canada-based Canadian Solar Inc. (CSIQ - Free Report) is set to report first-quarter 2017 financial results on Jun 6, before the market opens.
Last quarter, the company posted a negative earnings surprise of 17.24%. However, the company surpassed the Zacks Consensus Estimate in two of the last four quarters, with an average beat of 59.35%.
Let’s see how things are shaping up at the company prior to this announcement.
Factors at Play
For first-quarter 2017, the company announced its expectation for total module shipment in the range of 1.15–1.2 gigawatts (“GW”). This includes almost 120 megawatts (“MW”) of shipments to its own utility-scale solar project. Revenues are projected in the band of $570–$590 million with gross margin of 13–15%. Moreover, according to management, the module average selling price (“ASP”), which has been trending lower during the fourth quarter compared to earlier levels, is expected to continue in the first quarter as well.
In Feb 2017, Canadian Solar completed the sale of three utility-scale solar farms for over $195.32 million. Proceeds from this sale-out are expected to boost the company’s first-quarter earnings growth.
As stated during its fourth-quarter earnings call, Canadian Solar is focusing on developing solar power projects, primarily for sale to third parties with the goal of recycling equity and reinvesting in development of new projects. Depending on the timing of these project sales, first-quarter revenues may or may not exceed the guidance range.
However, significant anti-dumping (AD) and countervailing duty (CD), as a result of the preliminary annual review ruling by the U.S. Department of Commerce as well as lower module average selling price, are expected to impact Canadian Solar’s gross margin growth.
For the first quarter, the Zacks Consensus Estimate for earnings is a penny, reflecting a decline of 96.2% on revenues of $579.6 million, which implies a 19.7% year-over-year drop.
Canadian Solar Inc. Price and EPS Surprise
Canadian Solar Inc. Price and EPS Surprise | Canadian Solar Inc. Quote
Earnings Whispers
Our proven model does not conclusively show that Canadian Solar is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.
Zacks ESP: Canadian Solar has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a penny. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Canadian Solar carries a Zacks Rank #5 (Strong Sell).
We caution against stocks with a Zacks Rank #4 (Sell) or 5 going into the earnings announcement, especially if the company is seeing negative estimate revisions.
Recent Peer Releases
First Solar Inc. (FSLR - Free Report) reported first-quarter 2017 earnings of 25 cents a share. The Zacks Consensus Estimate was pegged at a loss of 13 cents. The reported number declined 84.9% from the prior-year figure of $1.66. The company carries a Zacks Rank #3.
SunPower Corp. (SPWR - Free Report) reported first-quarter 2017 loss of 42 cents per share, narrower than the Zacks Consensus Estimate of a loss of 66 cents. In the year-ago period, the company had posted loss of 42 cents. SunPower has a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.
JA Solar Holdings Co., Ltd. posted first-quarter 2017 adjusted earnings of 3 cents per diluted American Depositary Share (ADS). The Zacks Consensus Estimate was pegged at a loss of 2 cents. Earnings declined 91.2% from 34 cents in the year-ago period. The company has a Zacks Rank #4.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>