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JA Solar (JASO): What's Ahead for the Stock in Q4 Earnings?
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Solar company JA Solar Holdings Company Ltd. is set to release fourth-quarter 2016 results before the opening bell on Mar 16.
Last quarter, the company posted a positive earnings surprise of 400.00%. JA Solar was able to beat the Zacks Consensus Estimate in two of the trailing four quarters, with an average positive surprise of 102.21%.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
JA Solar caters to a geographically diverse customer base, spanning across Germany, Italy, the U.S., Spain, India, Korea, China and Japan. As the company entered the fourth quarter, it continued to observe slowdown in the Chinese market.
In fact, management also provided a conservative outlook for the fourth quarter for JA Solar’s business. This was primarily because of an expected temporary slowdown in demand within the domestic market.
Furthermore, the company expects shipments in the range of 1.2–1.3 gigawatts (“GW”) of cells and modules for the fourth quarter as all of them are a part of external sales.
However, apart from the anti-dumping policies in the U.S. and Europe, JA Solar has to face cut-throat competition from domestic peers. The fierce competition between Chinese solar companies often hurts the business margins of most firms. Also, high product costs continue to impact the stock and are expected to hamper fourth-quarter results as well.
Again, the victory of Donald Trump has raised uncertainties in the alternative energy industry. Far from supporting the renewable sector with any kind of incentives, the President-elect has promised to revive coal.
Moreover, the Zacks Consensus Estimate for the company’s revenues is pegged at $524 million for the fourth quarter, which reflects a decline of 26.12% on a year-over-year basis. Meanwhile, our estimate for the bottom line also reflects a 114% drop.
Earnings Whispers
Our proven model does not conclusively show that JA 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. But that is not the case here, as you will see below.
Zacks ESP: JA Solar has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 7 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: JA Solar carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
JA Solar Holdings, Co., Ltd. Price and EPS Surprise
First Solar Inc. (FSLR - Free Report) reported fourth-quarter 2016 earnings of $1.24 per share, beating the Zacks Consensus Estimate of 97 cents by 27.8%. The reported number, however, declined 22.5% from the prior-year figure of $1.60. The company carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
JinkoSolar Holding Co., Ltd. (JKS - Free Report) reported fourth-quarter 2016 non-GAAP earnings per American Depositary Share (ADS) of 88 cents, missing the Zacks Consensus Estimate of $1.33 by 33.8%. The reported figure also declined 62.4% from the year-ago quarter earnings of $2.34 per ADS. This company also has a Zacks Rank #3.
SunPower Corp. (SPWR - Free Report) reported fourth-quarter 2016 loss of 73 cents per share, wider than the Zacks Consensus Estimate loss of 51 cents. However, in the year-ago period, the company had posted earnings of $1.62 per share. The company has a Zacks Rank #5 (Strong Sell).
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
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JA Solar (JASO): What's Ahead for the Stock in Q4 Earnings?
Solar company JA Solar Holdings Company Ltd. is set to release fourth-quarter 2016 results before the opening bell on Mar 16.
Last quarter, the company posted a positive earnings surprise of 400.00%. JA Solar was able to beat the Zacks Consensus Estimate in two of the trailing four quarters, with an average positive surprise of 102.21%.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
JA Solar caters to a geographically diverse customer base, spanning across Germany, Italy, the U.S., Spain, India, Korea, China and Japan. As the company entered the fourth quarter, it continued to observe slowdown in the Chinese market.
In fact, management also provided a conservative outlook for the fourth quarter for JA Solar’s business. This was primarily because of an expected temporary slowdown in demand within the domestic market.
Furthermore, the company expects shipments in the range of 1.2–1.3 gigawatts (“GW”) of cells and modules for the fourth quarter as all of them are a part of external sales.
However, apart from the anti-dumping policies in the U.S. and Europe, JA Solar has to face cut-throat competition from domestic peers. The fierce competition between Chinese solar companies often hurts the business margins of most firms. Also, high product costs continue to impact the stock and are expected to hamper fourth-quarter results as well.
Again, the victory of Donald Trump has raised uncertainties in the alternative energy industry. Far from supporting the renewable sector with any kind of incentives, the President-elect has promised to revive coal.
Moreover, the Zacks Consensus Estimate for the company’s revenues is pegged at $524 million for the fourth quarter, which reflects a decline of 26.12% on a year-over-year basis. Meanwhile, our estimate for the bottom line also reflects a 114% drop.
Earnings Whispers
Our proven model does not conclusively show that JA 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. But that is not the case here, as you will see below.
Zacks ESP: JA Solar has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 7 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: JA Solar carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
JA Solar Holdings, Co., Ltd. Price and EPS Surprise
JA Solar Holdings, Co., Ltd. Price and EPS Surprise | JA Solar Holdings, Co., Ltd. Quote
Peer Releases
First Solar Inc. (FSLR - Free Report) reported fourth-quarter 2016 earnings of $1.24 per share, beating the Zacks Consensus Estimate of 97 cents by 27.8%. The reported number, however, declined 22.5% from the prior-year figure of $1.60. The company carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
JinkoSolar Holding Co., Ltd. (JKS - Free Report) reported fourth-quarter 2016 non-GAAP earnings per American Depositary Share (ADS) of 88 cents, missing the Zacks Consensus Estimate of $1.33 by 33.8%. The reported figure also declined 62.4% from the year-ago quarter earnings of $2.34 per ADS. This company also has a Zacks Rank #3.
SunPower Corp. (SPWR - Free Report) reported fourth-quarter 2016 loss of 73 cents per share, wider than the Zacks Consensus Estimate loss of 51 cents. However, in the year-ago period, the company had posted earnings of $1.62 per share. The company has a Zacks Rank #5 (Strong Sell).
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>