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What's in the Cards for Azure Power (AZRE) Q4 Earnings?

Zacks Equity Research

Azure Power Global Ltd. AZRE is set to report fourth-quarter fiscal 2019 results on Jun 10, after market close.

In the last reported quarter, the company delivered a positive earnings surprise of 141.67%. Moreover, it came up with an average trailing four-quarter beat of 106.49%.

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

Factors Under Consideration

Azure Power’s few major achievements during the fiscal fourth quarter are commendable. In March 2019, the company announced that it has exceeded 100 megawatts (MWs) of operating solar rooftop capacity, making the operating portfolio of Azure Roof Power one of the largest in India. This milestone was achieved with the company's latest rooftop project commissioning of various capacities under Delhi Jal Board, Indian Railways and Solar Energy Corporation of India (SECI).

Prior to this announcement, the company received a letter of award (LOA) for a 300 MW solar power project through an auction conducted by SECI. Azure Power also declared that it has commissioned over 250 MWs, during the soon-to-be-reported quarter.

Considering these factors, we may expect Azure Power’s upcoming quarterly results to reflect solid revenues. In line with this, the Zacks Consensus Estimate for fourth-quarter revenues is pegged at $41.8 million, suggesting 20.5% growth from the last fiscal’s fourth-quarter figure. 

Azure Power Global Ltd. Price and EPS Surprise

Azure Power Global Ltd. Price and EPS Surprise

Azure Power Global Ltd. price-eps-surprise | Azure Power Global Ltd. Quote

As the company is consistently making efforts to become the most cost-effective power producer worldwide, we may expect it to witness a downtrend in its cost structure, particularly interest expenses. Moreover, declining costs of solar module prices and efficiency gains in balance of system costs are projected to reduce the company’s project cost per megawatt operating in the fourth quarter.

Such declining cost structure along with a solid estimated top-line performance should boost Azure Power’s bottom line in quarter to be reported. The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 9 cents, indicating a massive improvement of 800% from the year-ago period’s reported number.

What the Zacks Model Unveils

Our proven model does not conclusively show that Azure Power is likely to beat estimates in the fiscal fourth quarter. This 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.

Earnings ESP: Azure Power 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: Azure Power has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Please 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

Canadian Solar Inc. CSIQ incurred an adjusted loss of 29 cents per share in first-quarter 2019, narrower than the Zacks Consensus Estimates of a loss of 44 cents.

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

SolarEdge Technologies, Inc. SEDG reported first-quarter 2019 adjusted earnings of 64 cents per share, which surpassed the Zacks Consensus Estimate of 62 cents by 3.2%.

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