Canadian Solar Inc. (CSIQ - Free Report) is set to report second-quarter 2018 results on Aug 14, before the market opens.
In the last reported quarter, the company posted a positive earnings surprise of 89.47%. Moreover, the bottom line beat the Zacks Consensus Estimate in three of the last four quarters, with an average positive surprise of 29.35%.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
During the second quarter, Canadian Solar acquired three solar photovoltaic (PV) projects totaling 364 megawatts-peaks (MWp), in Brazil's A-4 auction. Moreover, the company started the commercial operation of its 35 megawatt-peak (MWp) solar project in India. Also, Canadian Solar built its largest solar project in Japan totaling 56.3MWp. Such developments in its portfolio are projected to boost the company’s revenue generation capability, which, in turn, should get reflected in the upcoming quarterly results.
To this end, the Zacks Consensus Estimate for Canadian Solar’s second-quarter revenues, pegged at $715 million, reflects an annual growth of 3.3%. Moreover, consensus estimate for revenues remains within the company’s second-quarter guidance range of $690-$730 billion.
Furthermore, the company expects cost of production to decline throughout 2018 due to the reduction in material costs and the availability of new, higher efficiency cell and module capacity. This, in turn, should boost the company’s bottom line and we may expect to witness the same in the to-be reported quarter. In line with this, the Zacks Consensus Estimate for second-quarter earnings of 38 cents reflects a massive year-over-year improvement of 393.3%.
However, Canadian Solar expects to face volatility in certain key markets such as the United States and India due to implementation of trade protectionism in these nations. This may weigh on the company’s gross margin growth in the second quarter, although management forecasts a positive growth in margins buoyed by project sales expectations.
Canadian Solar Inc. Price and EPS Surprise