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Daqo New Energy (DQ) to Post Q2 Earnings: What's in the Offing?

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Daqo New Energy Corp. (DQ - Free Report) is slated to release second-quarter 2021 results before the bell on Aug 18. The company is likely to have gained from higher prices, strong volumes and its efforts to lower costs in the second quarter.

The leading producer of high-purity polysilicon beat the Zacks Consensus Estimate for earnings in two of the trailing four quarters while missed twice. In this timeframe, it delivered an earnings surprise of 155.6%, on average. It delivered an earnings surprise of 21.4% in the last reported quarter.

The company’s shares have surged 125.1% over a year compared with the industry’s 25.7% rise.

 

Zacks Investment Research
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Let’s see how things are shaping up for this announcement.

What do the Estimates Say?

The Zacks Consensus Estimate for the company’s second-quarter sales is currently pegged at $462 million, which suggests a rise of 246% from the year-ago quarter’s tally.

Some Factors at Play

Daqo New Energy’s second-quarter results are expected to reflect the benefits of strong production and sales volumes. It is likely to have witnessed strong customer demand for high-purity polysilicon in the quarter.

The company, in its first-quarter call, said that it expects polysilicon production volume for the second quarter to be 20,000-21,000 metric tons (MT). Notably, the company registered production of 18,097 MT in the year-ago quarter.

The company also expects polysilicon sales volumes of 20,000-21,000 MT for the second quarter. The projected figure is higher than 18,881 MT recorded in second-quarter 2020. Higher sales volumes are likely to have supported its top line in the second quarter.

Daqo New Energy is also likely to have benefited from higher average selling prices (“ASP”) and its actions to improve its cost structure in the to-be-reported quarter. The company’s energy efficiency efforts and enhanced manufacturing efficiencies are contributing to lower costs. It is also benefiting from the newly-implemented digital manufacturing system.

The company, in May, also said that it expects its ASP for the second quarter to be in the range of $19-$20 per kg, reflecting a significant improvement compared with the first-quarter level of $11.90 per kg. Higher prices are expected to have boosted its sales and margins in the quarter to be reported.

 

DAQO New Energy Corp. Price and EPS Surprise

 

DAQO New Energy Corp. Price and EPS Surprise

DAQO New Energy Corp. price-eps-surprise | DAQO New Energy Corp. Quote

Zacks Model

Our proven model does not conclusively predict an earnings beat for Daqo New Energy this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Daqo New Energy is 0.00%. The Zacks Consensus Estimate for earnings for the second quarter is currently pegged at $3.29. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Daqo New Energy currently carries a Zacks Rank #3.

Stocks That Warrant a Look

Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Deere & Company (DE - Free Report) , scheduled to release earnings on Aug 20, has an Earnings ESP of +17.82% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Advance Auto Parts, Inc. (AAP - Free Report) , scheduled to release earnings on Aug 24, has an Earnings ESP of +25.92% and carries a Zacks Rank #2.

Burlington Stores, Inc. (BURL - Free Report) , scheduled to release earnings on Aug 26, has an Earnings ESP of +17.37% and sports a Zacks Rank #1.