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Canadian Solar (CSIQ) Q3 Earnings: Stock to Pull a Surprise?

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Ontario, Canada-based Canadian Solar Inc. (CSIQ - Free Report) is expected to release third-quarter 2016 financial results on Nov 8. Last quarter, the company posted a positive earnings surprise of 70.00%.

Let's see how things are shaping up for this announcement.

Factors at Play

For the third quarter, the company expects total module shipment in the range of 1.2 gigawatts (“GW”) to 1.3 GW, including 10 MW of shipments to its own utility-scale solar project. Revenues are projected in the band of $660 million to $710 million (compared with $805.9 million in second quarter), with gross margin of 14–16%. Moreover, according to management, the module average selling price (“ASP”) during the third quarter is trending lower than the second-quarter levels.

As stated by the company during its second-quarter earnings call, Canadian Solar is focusing on monetizing its solar power plant assets. Depending on the timing of these project sales, revenues may or may not exceed the guidance range.

CANADIAN SOLAR Price and EPS Surprise

 

CANADIAN SOLAR Price and EPS Surprise | CANADIAN SOLAR Quote

Earnings Whispers

Our proven model does not conclusively show that Canadian Solar is likely to beat on 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. That is not the case here as you will see below.

Zacks ESP: Canadian Solar has an Earnings ESP 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 25 cents.

Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Zacks Rank: Canadian Solar’s Zacks Rank #3, when combined with a 0.00% ESP, makes surprise prediction difficult.

We note that Sell-rated stocks (#4 or #5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

A Peer Release

First Solar Inc. (FSLR - Free Report) reported third-quarter 2016 earnings of $1.22 a share, beating the Zacks Consensus Estimate of 69 cents by a wide 76.8%.

Upcoming Releases

Sunrun Inc. (RUN - Free Report) is slated to report third-quarter 2016 results on Nov 10. The Zacks Consensus Estimate is pegged at a loss of 43 cents. The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

SunPower Corp. (SPWR - Free Report) is slated to report third-quarter 2016 results on Nov 9. The company has a Zacks Rank #3. The Zacks Consensus Estimate is pegged at a loss of 67 cents.

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