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Daqo New Energy (DQ) to Post Q1 Earnings: What's in the Cards?

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Daqo New Energy Corp. DQ is slated to release first-quarter 2021 results before the bell on May 18. The company is likely to have gained from higher prices, strong volumes and its efforts to lower costs in the first quarter.

The leading producer of high-purity polysilicon beat the Zacks Consensus Estimate for earnings in two of the trailing four quarters while missed twice. In this timeframe, it delivered an earnings surprise of 160.7%, on average. It delivered a negative earnings surprise of 16.5% in the last reported quarter.

The company’s shares have surged 653% over a year compared with the industry’s 1.1% rise.


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

What do the Estimates Say?

The Zacks Consensus Estimate for the company’s first-quarter sales is currently pegged at $242.8 million, which suggests a rise of 43.8% from the year-ago quarter’s tally.

Some Factors at Play

Daqo New Energy’s first-quarter results are expected to reflect the benefits of strong production and sales volumes. The company, in its fourth-quarter call, said that it expects polysilicon production volume for the first quarter to be 19,500-20,500 metric tons (MT). Notably, the company registered production of 19,777 MT in the year-ago quarter.

The company also expects polysilicon sales volumes of 20,000-21,000 MT for the first quarter. The projected figure is higher than 19,101 MT recorded in first-quarter 2020. Higher sales volumes are likely to have supported its top line in the first quarter.

Daqo New Energy is also likely to have benefited from higher average selling prices and its actions to improve its cost structure in the to-be-reported quarter. The company’s energy efficiency efforts and enhanced manufacturing efficiencies are contributing to lower costs. It is also benefiting from the newly-implemented digital manufacturing system.

The company, in March, also said that it witnessing rising polysilicon market prices since the beginning of 2021. Higher prices are expected to have boosted its sales and margins in the quarter to be reported.

DAQO New Energy Corp. Price and EPS Surprise

DAQO New Energy Corp. Price and EPS Surprise
DAQO New Energy Corp. Price and EPS Surprise

DAQO New Energy Corp. price-eps-surprise | DAQO New Energy Corp. Quote

Zacks Model

Our proven model does not conclusively predict an earnings beat for Daqo New Energy this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Daqo New Energy is 0.00%. The Zacks Consensus Estimate for earnings for the first quarter is currently pegged at 89 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Daqo New Energy currently carries a Zacks Rank #1.

Stocks That Warrant a Look

Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Sociedad Quimica y Minera de Chile S.A. SQM, scheduled to release earnings on May 19, has an Earnings ESP of +9.09% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fisker Inc. FSR, scheduled to release earnings on May 17, has an Earnings ESP of +18.42% and carries a Zacks Rank #3.

The AZEK Company Inc. AZEK, scheduled to release earnings on May 13, has an Earnings ESP of +6.95% and a Zacks Rank #3.

Zacks Top 10 Stocks for 2021

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Fisker Inc. (FSR) : Free Stock Analysis Report

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