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Will Yingli Green (YGE) Disappoint this Earnings Season? - Analyst Blog

Zacks Equity Research

Yingli Green Energy Holding Co. Ltd. YGE will release fourth-quarter 2014 financial results before the opening bell on Mar 25, 2015. The company has delivered an average negative surprise of 39.98% in the last four quarters. Let's see how things are shaping up for this announcement.

Factors Affecting this Quarter

China-based, Yingli Green continued to witness a growing order book in the fourth quarter of 2014. The company struck a deal with UK-based Solarcentury Holdings Ltd to supply 72 megawatts (“MW”) of multi-crystalline and monocrystalline solar panels. Yingli Green also entered into an agreement to supply 120 MW of YGE 72 Cell solar panels for a 300-MW project in France.

It is worth noticing that in the third quarter, the company reported higher demand for photovoltaic (“PV”) modules from its key markets, namely China, Japan and other emerging nations. Yet, the company had to reduce its 2014 shipment volumes expecting lower demand. It must be noted that China has already fallen short of achieving its 2014 target of installing 14 gigawatts (“GW”) of solar capacity, having installed only 10.6 GW. With the weakness seen in the domestic solar market, similar to other Chinese solar players dependent on the domestic market for revenue growth, Yingli Green's results are bound to take a hit.

Earnings Whispers

Our proven model does not conclusively show that Yingli Green is likely to beat earnings this quarter. 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. That is not the case here.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 14 cents, resulting in an ESP of 0.00%.

Zacks Rank: Yingli Green’s Zacks Rank #3 when combined with a 0.00% ESP makes a surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings release.

Other Peer Releases

JA Solar Holdings Co. Ltd. JASO recorded non-GAAP adjusted earnings of 30 cents per American Depositary Share (“ADS”) in the fourth quarter of 2014, beating the Zacks Consensus Estimate of 27 cents by 11.1%.

ReneSola Ltd.’s SOL adjusted loss per ADS of 15 cents in the fourth quarter of 2014 came in line with the Zacks Consensus Estimate.

Canadian Solar Inc. CSIQ reported fourth-quarter earnings of $1.28 per share, lagging the Zacks Consensus Estimate by 5.9%.
 


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