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Yingli Green Energy (YGE) Q3 Earnings: What's in the Cards?

Zacks Equity Research

Yingli Green Energy Holding Company Ltd. YGE, also known as Yingli Green Energy, is scheduled to report third-quarter 2017 results before the opening bell on Dec 19.

Last quarter, the company reported a negative earnings surprise of 26.83%. Let’s see how things are shaping up for this announcement.

Factors to Consider

During the second-quarter earnings call, Yingli Green Energy stated that it expects significant increase in third-quarter shipments, which is estimated at 550-600 megawatts (MW). The estimate reflects an increase of 50.6-64.2% from the year-ago quarter’s figure. China is expected to comprise a major portion of the total shipment.

In the second quarter, the company’s gross margin suffered due to declining average selling price (ASP) of Photovoltaic (PV) modules shipments. To cushion the decelerating prices, Yingli Green Energy has been resorting to cost-effective measures, which include reduction of in-house cost of PV modules.

However, the drop in cost was slower than the decline of the ASP, since the company is still experiencing a bad restructure. In the yet-to-be-reported quarter, management expects similar trends to continue.

Also, the company’s weak operating cash flow figures are expected to be reflected in the third-quarter results.

Earnings Whispers

Our proven model does not conclusively show that Yingli Green Energy will beat estimates this quarter. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here, as you will see below.

Zacks ESP:  Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate for Yingli Green Energy are pegged at a loss of $2.61. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Yingli Green Energy carries a Zacks Rank #3, which when combined with an ESP of 0.00% makes 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.

Yingli Green Energy Holding Company Limited Price and EPS Surprise

Yingli Green Energy Holding Company Limited Price and EPS Surprise | Yingli Green Energy Holding Company Limited Quote

Peer Releases

JinkoSolar Holding Co., Ltd. JKS reported third-quarter 2017 earnings per American Depositary Share (ADS) of 4 cents that missed the Zacks Consensus Estimate of 17 cents by 76.5%. The figure also declined 95.7% from the year-ago quarter earnings of 92 cents per ADS.

First Solar Inc. FSLR reported third-quarter 2017 adjusted earnings of $1.95, beating the Zacks Consensus Estimate of 85 cents by a whopping 129.4%. Revenues of $1,087 million in the quarter surpassed the Zacks Consensus Estimate of $824 million by 31.9%.

SunPower Corp. SPWR reported third-quarter 2017 earnings of 21 cents per share. The Zacks Consensus Estimate was pegged at a loss of 36 cents. In the year-ago quarter, the company had reported earnings of 88 cents per share.

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First Solar, Inc. (FSLR) : Free Stock Analysis Report
 
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