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JinkoSolar (JKS) Q3 Earnings Miss Estimates, Revenues Up Y/Y

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JinkoSolar Holding Co., Ltd. JKS reported third-quarter 2019 earnings per share of 65 cents, which missed the Zacks Consensus Estimate of 80 cents by 18.75%.

Total Revenues

In the quarter under review, JinkoSolar’s total revenues of $1,047 million (RMB 6,690 million) beat the Zacks Consensus Estimate of $1,033 million by 1.4%. The top line improved 4.3% on a year-over-year basis from $974.8 million (RMB 6,694.8 million). The upside can be mainly attributed to increased solar module shipments.

Quarterly Highlights

In the third quarter, JinkoSolar’s total solar module shipments were 3,326 megawatts (MW), up 12.6% year over year from 2,953 MW.

The company’s total operating expenses rose 18% year over year to $133.6 million (RMB 955 million) from $117.9 million (RMB 809.6 million). This increase stemmed from rising selling and marketing, and general and administrative expenses in the third quarter.

The company incurred $13.3 million (RMB 94.9 million) as interest expenses, up 70.7% year over year from $8.1 million (RMB 80.6 million) due to increased borrowings and the cessation of interest capitalization on certain completed solar projects.

As of Sep 30, 2019, the company's in-house annual silicon wafer, solar cell and solar module production capacities were 14.5 GW (including 11.0 GW of mono wafers), 9.2 GW (all for PERC cells) and 15.0 GW, respectively.

Financial Condition

As of Sep 30, 2019, JinkoSolar had cash and cash equivalents of $579.8 million (RMB 4.14 billion), up from $451.6 million (RMB 3,105 million) as of Dec 31, 2018.

Total interest-bearing debts as of Sep 30, 2019, were $1.71 billion (RMB 12.22 billion) compared with $1.41 billion (RMB 9.71 billion) as of Mar 31, 2019.

JinkoSolar Holding Company Limited Price, Consensus and EPS Surprise

Recent Business Developments

In September, the company signed a module supply contract with METKA EGN, a world-class EPC contractor, for 300 MW of JinkoSolar's ultra-high efficiency Cheetah modules to be installed at a large-scale solar power plant in the municipality of Talaván, Cáceres, Spain.

In November, JinkoSolar entered an agreement to sell two solar power plants in Mexico with a combined capacity of 155 MW to White River Renewables, a Mexican renewable energy company. The final closing of the transaction is subjected to customary approvals. The sale of overseas power plants is consistent with the company's strategy to focus on the solar manufacturing business.

Q4 and Full-Year 2019 Guidance

The company expects total revenues for fourth-quarter 2019 in the range of $11.7-$12.3 billion. The Zacks Consensus Estimate for the same is pegged at $1.37 billion, which lies well below the company’s guided range.

Gross margin for the fourth quarter is expected between 18.5% and 20.5%

For the third quarter, JinkoSolar expects total solar module shipments of 4.2-4.4 GW.

For 2019, the company projects total solar module shipments of 14-14.2 GW.

Zacks Rank

JinkoSolar currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Solar Releases

Enphase Energy, Inc. (ENPH - Free Report) reported third-quarter 2019 adjusted earnings of 30 cents per share, which surpassed the Zacks Consensus Estimate of 25 cents by 20%. The bottom line also improved a massive 650% from 4 cents reported in the prior-year quarter.

First Solar Inc. FSLR reported third-quarter 2019 adjusted earnings of 29 cents per share, missing the Zacks Consensus Estimate of $1.06 by 72.6%. The reported number, however, grew from the prior-year quarter’s loss per share of 18 cents.

SolarEdge Technologies, Inc. SEDG reported third-quarter 2019 adjusted earnings of $1.21 per share, which surpassed the Zacks Consensus Estimate of 99 cents by 22.2%. The bottom line, moreover, rose 28.7% from 94 cents in the prior- year quarter.

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