U.S. Markets closed

What's in the Cards for Canadian Solar (CSIQ) Q1 Earnings?

Zacks Equity Research

Canadian Solar Inc. CSIQ is expected to report first-quarter 2019 results soon.

In the last reported quarter, the company delivered a positive earnings surprise of 85.06%. Moreover, the bottom line outpaced the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 65.51%.

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

Factors at Play

Canadian Solar revealed its outlook for the first quarter of 2019 during the fourth-quarter earnings call. The outlook reflected a lower module production and sales for the Chinese New Year holiday season for the to-be-reported quarter. Moreover, sales for the quarter would also show negative impacts of the ongoing module ASP pressure, decreased sales of solar power project and an expected foreign exchange loss due to the appreciation of Chinese RMB against the U.S. dollar.

In line with this, the Zacks Consensus Estimate for first-quarter revenues is pegged at $471 million, indicating a massive decline of 67% from the figure reported in the year-ago quarter.

Meanwhile, Canadian Solar’s operating expenses have been witnessing a rise for the last few quarters. In the fourth quarter, operating expenses for the company grew 52.4% year over year. The company’s income tax expenses also increased in the last few quarters. Thus, we may expect the rising operating expenses trend to continue in the soon-to-be-reported quarterly results as well.

In line with this, the Zacks Consensus Estimate for first-quarter loss stands at 44 cents, implying a significant deterioration from the previous year’s first-quarter earnings of 72 cents per share.

Earnings Whispers

Our proven model does not show that Canadian Solar is likely to beat bottom-line estimates in first-quarter 2019. 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. This is 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 carries a Zacks Rank #3, 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.

Conversely, 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.

Canadian Solar Inc. Price and EPS Surprise

 

Canadian Solar Inc. Price and EPS Surprise

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

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.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Enphase Energy, Inc. (ENPH) : Free Stock Analysis Report
 
First Solar, Inc. (FSLR) : Free Stock Analysis Report
 
Sunrun Inc. (RUN) : Free Stock Analysis Report
 
Canadian Solar Inc. (CSIQ) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research