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Canadian Solar (CSIQ) Q4 Earnings: Disappointment in Store?

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Ontario, Canada-based Canadian Solar Inc. (CSIQ - Free Report) is expected to release fourth-quarter 2016 financial results on Mar 21. Last quarter, the company posted an earnings surprise of 0.00%.

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

Factors at Play

For the fourth quarter, the company expects total module shipment in the range of 1.4 gigawatts (“GW”) to 1.5 GW, including 30 MW of shipments to its own utility-scale solar project. Revenues are projected in the band of $600 million to $750 million, with gross margin of 11–16%. Moreover, according to management the module average selling price (“ASP”) during the fourth quarter is trending lower than the third-quarter levels.

As stated by the company during its third-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.

Moreover, the manufacturing gross margin during the fourth quarter is expected to be impacted because the company’s cell factory is out of service.

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 22 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Canadian Solar has a Zacks Rank #5 (Strong Sell). Please 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.

Canadian Solar Inc. Price and EPS Surprise

 

Canadian Solar Inc. Price and EPS Surprise | Canadian Solar Inc. 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.

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