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JinkoSolar (JKS) Q3 Earnings Miss Estimates, Revenues Beat

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JinkoSolar Holding Co., Ltd. (JKS - Free Report) reported third-quarter 2020 loss per American Depositary Share (ADS) of 91 cents in contrast to the Zacks Consensus Estimate of earnings of 85 cents. The bottom line also deteriorated significantly from the year-ago quarter’s earnings of 65 cents per ADS.  

Total Revenues

In the quarter under review, JinkoSolar’s total revenues of $1,291.8 million (RMB 8.77 billion) beat the Zacks Consensus Estimate of $1,288 million by 0.3%. The top line improved 17.2% on a year-over-year basis from $1,046.7 million (RMB 7.48 billion). The upside can be mainly attributed to an increase in solar module shipments.

Quarterly Highlights

In the third quarter, JinkoSolar’s total solar module shipments were 5,117 megawatts (MW), up 53.8% year over year. The shipments were also within the guidance range of 5 GW-5.3 GW.

Its gross margin was 17%, which coincided with the lower end of the guidance range of 17-19% but came in lower than 21.3% recorded in the third quarter of 2019. The year-over-year deterioration was attributable to a decline in the average selling price of solar modules due to intensified global market competition in the solar modules space.

The company’s total operating expenses slipped 0.6% year over year to $139.8 million (RMB 948.9 million). This decline in expenses stemmed from a decrease in warranty cost.

The company incurred $19 million (RMB 129.2million) as interest expenses, up 36.2% year over year, due to an increase in interest expense with the increase of interest-bearing debts.

Financial Condition

As of Sep 30, 2020, JinkoSolar had cash and cash equivalents of $850.6 million, up from $812.1 million as of Dec 31, 2019.

Total interest-bearing debts as of Sep 30, 2020 were $2.53 billion compared with $1.93 billion as of Dec 31, 2019.

Recent Business Developments

In September 2020, the company announced its intention to cooperate with ENEOS Corporation, Japan's largest oil refiner, on the provision of solar modules for a Virtual Power Plant project.

In the same month, JinkoSolar announced that it had supplied Trung Nam Group with 611MW of Tiger bifacial transparent backsheet modules, which were installed at the Thuan Nam solar power plant project in Vietnam. Earlier in August, JinkoSolar signed a contract with Shanghai Electric to supply approximately 1 GW of solar modules for Phase V of the Dubai Electricity and Water Authority Solar Park.

Guidance

For the fourth quarter of 2020, JinkoSolar expects total solar module shipments to be in the range of 5.5 GW-6 GW. Total revenues for the fourth quarter are expected to be in the range of $1.31 billion-$1.43 billion. Gross margin is expected between 13% and 15%.

For 2020, the company currently projects total solar modules shipment of 18.5-19 GW compared to prior guidance range of 18-20 GW.

Zacks Rank

JinkoSolar currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some Q3 Solar Releases

Enphase Energy (ENPH - Free Report) reported third-quarter 2020 adjusted earnings of 20 cents per share, which missed the Zacks Consensus Estimate of 24 cents by 25%.

First Solar (FSLR - Free Report) reported third-quarter 2020 adjusted earnings of $1.45 per share, which surpassed the Zacks Consensus Estimate of 60 cents by 141.7%.

SunPower Corp. (SPWR - Free Report) incurred an adjusted loss of 4 cents per share in third-quarter 2020, narrower than the Zacks Consensus Estimate of a loss of 5 cents.

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