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Sunworks (SUNW) to Post Q1 Earnings: What's in the Cards?

Zacks Equity Research

Sunworks, Inc. SUNW is set to report first-quarter 2019 results on May 14, after the market closes.

In the last reported quarter, the company delivered a positive earnings surprise of 100%. Moreover, earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, the average beat being 7.50%.

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

Factors at Play

In 2018, Sunworks was awarded 19 projects by Omni worth approximately $4 million. This is likely to generate solid revenues for the company in 2019. Moreover, the company’s growing residential business should boost the top line.

However, as announced in its fourth-quarter earnings call, Sunworks expects soft first-quarter revenues due to the rainy weather in California. In line with this, the Zacks Consensus Estimate for Sunworks’ first-quarter revenues is pegged at $13 million, indicating 3.4% decline from the figure reported in the year-ago quarter.

Meanwhile, Sunworks' operating expenses witnessed a decline for the ninth consecutive time in the fourth quarter of 2018. As the company continues with its efforts to reduce operating expenses, we may expect the declining trend in operating expenses to continue in the soon-to-be-reported quarterly results. Additionally, management expects total interest expenses to be relatively constant, going forward. These factors should cumulatively benefit Sunworks’ first-quarter bottom-line performance.

In line with this, the Zacks Consensus Estimate for first-quarter loss is pegged at 3 cents. In the year-ago quarter, the company incurred a loss of 7 cents per share.

Sunworks, Inc. Price and EPS Surprise

 

Sunworks, Inc. Price and EPS Surprise

Sunworks, Inc. price-eps-surprise | Sunworks, Inc. Quote

Earnings Whisper

Our proven model does not show a likely beat for Sunworks this earnings season. That 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. This is not the case here.

Earnings ESP: Sunworks 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 sports a Zacks Rank #1, which when combined with a 0.00% Earnings ESP makes earnings surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.

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.

Recent Solar Releases

First Solar Inc. FSLR incurred a loss of 64 cents per share in first-quarter 2019, wider than the Zacks Consensus Estimate of a loss of 13 cents.

Enphase Energy ENPH reported first-quarter 2019 adjusted earnings of 8 cents per share against the adjusted loss of a cent in the year-ago quarter.

Sunrun Inc. RUN reported first-quarter 2019 loss of 12 cents per share against the Zacks Consensus Estimate of earnings of 32 cents.

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