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Canadian Solar (CSIQ) to Post Q2 Earnings: What's in Store?

Canadian Solar Inc. CSIQ is set to report second-quarter 2021 results on Aug 12, before market open.

In the last reported quarter, the company delivered an earnings surprise of 28.57%. In the trailing four quarters, the company came up with an earnings surprise of 207.86%, on average.

Factors at Play

With increasing demand for solar projects, Canadian Solar continues to benefit from project monetization. Keeping up with this trend, in the second quarter, the company completed the sale the Maplewood 1 and Maplewood 2 solar projects, having a combined capacity of 328 megawatt-peak (MWp), to a leading U.S. annuity and life insurance company. Revenues recognized from such sales must have contributed favorably to the company’s top line in the soon-to-be-reported quarter.

Canadian Solar Inc. Price and EPS Surprise

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

With gradual economic recovery lately, the company has been witnessing increase in average selling price (ASP) for modules. In fact, Canadian Solar witnessed a 10% sequential hike in the ASP during the first quarter. The company’s top line is likely to have observed solid growth backed by strong shipment volumes, carrying on the momentum of the first quarter.

The Zacks Consensus Estimate for second-quarter revenues is pegged at $1.43 billion, suggesting an improvement of 104.9% from the figure reported in the year-ago quarter.

Sharp appreciation of the Chinese currency, RMB, relative to the U.S. dollar, has been causing significant foreign exchange loss. As a result, cost currency appreciation and revenue currency depreciation might have hurt Canadian Solar’s bottom-line performance in the soon-to-be-reported quarter.

Moreover, increased transportation cost after the Suez Canal event this year has been pushing up the company’s expenses, thereby casting a shadow over its quarterly earnings growth. We expect this factor to have once again hampered Canadian Solar’s earnings performance in the second quarter.

The Zacks Consensus Estimate for loss per share stands at 31 cents, implying a significant deterioration from the year-ago period’s reported earnings of 9 cents.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Canadian Solar this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings surprise. But that’s 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 of 3. You can see the complete list of today's Zacks #1 Rank stocks here.

Recent Solar Releases

Enphase Energy ENPH delivered second-quarter adjusted earnings of 53 cents per share, which surpassed the Zacks Consensus Estimate of 42 cents.

First Solar Inc. FSLR reported second-quarter 2021 adjusted earnings of 77 cents per share, which surpassed the Zacks Consensus Estimate of 60 cents by 28.3%.

SolarEdge Technologies SEDG reported second-quarter adjusted earnings of $1.28 per share, which surpassed the Zacks Consensus Estimate of $1.12.

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