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

Canadian Solar Inc. CSIQ is slated to report first-quarter 2020 results on May 28, before market open.

In the last reported quarter, the company delivered a massive positive earnings surprise of 89.09%. The bottom line also outpaced the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 83.24%.

Let's see how things have shaped up prior to this announcement.

Factors at Play

Solid solar module sales volume is expected to have been a major growth driver of Canadian Solar’s first-quarter revenues. Moreover, considering its stable average selling price (ASP) and lower cost of production, we expect the upcoming quarterly results to reflect strong revenue growth.

However, part of this shipment volume as well as demand for its products might show signs of weakness owing to the novel coronavirus outbreak resulted in uncertainty in demand and delivery of products from the middle of the to-be-reported quarter. Also, the company witnessed some capacity loss in China during the first quarter.

Canadian Solar Inc. Price and EPS Surprise

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

Nevertheless, during the quarter, Canadian Solar completed the sale of a handful of solar portfolios, including the divestiture of the 56.3 megawatt-peak (MWp) Yamaguchi Shin Mine, a solar power plant in Japan and a 17.7 MWp portfolio sale in Italy to Sonnedix. The company’s first-quarter results are likely to reflect proceeds from such project sales.

For first-quarter revenues, the Zacks Consensus Estimate is pegged at $794.7 million, suggesting solid improvement of 63.9% from the figure reported in the year-ago quarter.

Since shipment volume is likely to have been hampered during the first quarter due to COVID-19-led trade restrictions, shipment costs might have been lower on a year-over-year basis for the company. This must have pushed down its operating expenses, thereby bolstering the quarterly bottom line. Moreover, solid revenue growth must also have contributed to Canadian Solar’s bottom line.

The Zacks Consensus Estimate for first-quarter earnings stands at $1.16 per share, implying 500% increase from the year-ago period reported figure.

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 a positive 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 2. You can see the complete list of today's Zacks #1 Rank stocks here.

Recent Solar Releases

Enphase Energy ENPH reported first-quarter 2020 adjusted earnings of 38 cents per share, which surpassed the Zacks Consensus Estimate of 32 cents by 18.8%. The bottom line surged a massive 375% from 8 cents reported in the prior-year quarter.

SolarEdge Technologies, Inc. SEDG reported first-quarter 2020 adjusted earnings of $1.03 per share, which missed the Zacks Consensus Estimate of $1.20 by 14.2%. The bottom-line figure, however, surged 47.1% from 70 cents reported in the prior-year quarter.

First Solar FSLR reported first-quarter 2020 adjusted earnings of 85 cents per share, which surpassed the Zacks Consensus Estimate of 24 cents by 254.2%. The bottom line also grew from the year-ago quarter's loss of 64 cents per share.

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Canadian Solar Inc. (CSIQ): Free Stock Analysis Report
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