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Canadian Solar (CSIQ) to Report Q4 Earnings: What's in Store?

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Canadian Solar Inc. (CSIQ - Free Report) is expected to report fourth-quarter and 2019 results on Mar 26, before market open.

In the last reported quarter, the company delivered a negative earnings surprise of 25%.However, the bottom line outpaced the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 82.23%.

Let's see how things have shaped up prior to this announcement.

Factors at Play

Sale proceeds from successful divestitures of a handful of projects are expected to have boosted Canadian Solar’s top line in the fourth quarter. For instance, in November 2019, the company completed the sale of 49% interest in three solar photovoltaic projects — Horus, Tastiota and El Mayo — to Korea Electric Power Corporation and Sprott Korea. In December, Canadian Solar completed the divestment of an operating solar power plant in Izu-shi, Shizuoka Prefecture of Japan to Canadian Solar Infrastructure Fund (CSIF) for $42.1 million.

In the same month, another divestiture of a 3.3 MWp Milborne Port project in the United Kingdom was completed by the company.

Canadian Solar Inc. Price and EPS Surprise

Canadian Solar Inc. Price and EPS Surprise

Canadian Solar Inc. price-eps-surprise | Canadian Solar Inc. Quote

However, timely shipment of solar module sales by Canadian Solar may have been hampered in the back half of the fourth quarter in the wake of the coronavirus outbreak that caused supply chain disruption across borders.   

For fourth-quarter revenues, the Zacks Consensus Estimate is pegged at $869.4 million, suggesting a decline of 3.5% from the figure reported in the year-ago quarter.

Delayed shipments tend to put pressure on the company’s quarterly bottom line as well. Moreover, decline in sales price of solar panels dampens margin from each sale, making bottom-line growth difficult.

The Zacks Consensus Estimate for fourth-quarter earnings stands at 55 cents, implying 65.8% deterioration from the previous year's fourth-quarter earnings.

In December, Canadian Solar’s board of directors authorized the repurchase of its common stock worth $150 million for a six-month period, beginning Dec 9, 2019, and ending Jun 8, 2020. Such share repurchase decision indicates itssolid cash balance position, which we expect its upcoming results to reflect duly.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Canadian Solar this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive earnings surprise. But that’s not the case here, as you will see below.

Earnings ESP: Canadian Solar has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: The company currently carries a Zacks Rank of 3. You can see the complete list of today's Zacks #1 Rank stocks here.

Recent Solar Releases

First Solar (FSLR - Free Report) reported fourth-quarter 2019 adjusted earnings of $2.02 per share, which missed the Zacks Consensus Estimate of $2.79 by 27.6%.

Enphase Energy (ENPH - Free Report) reported fourth-quarter 2019 adjusted earnings of 39 cents per share, which surpassed the Zacks Consensus Estimate of 33 cents by 18.2%.

ReneSola Ltd. (SOL - Free Report) reported adjusted earnings of 9 cents per American Depositary Share (ADS) from continuing operations in fourth-quarter 2019, which beat the Zacks Consensus Estimate of 2 cents by a massive 350%.

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