What's in Store for Canadian Solar (CSIQ) in Q3 Earnings?

Canadian Solar Inc. CSIQ is set to report third-quarter 2017 financial results on Nov 9, before the market opens.

Last quarter, the company delivered a positive earnings surprise of 6.25%. However, it missed the Zacks Consensus Estimate in two of the last four quarters, with an average negative surprise of 227.75%.

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

Factors at Play

For third-quarter 2017, the company expects total module shipment in the range of 1.65-1.70 gigawatts (GW). Revenues are projected in the band of $805-$825 million with gross margin of 15-17%.

During the second-quarter earnings call, Canadian Solar stated that it expects to realize revenues of a few project sales in the third quarter. This, in turn, might drive the company’s top line. In line with this, the Zacks Consensus Estimate for the company’s third quarter revenues, pegged at $818.7 million, reflects an annual growth of 24.6%.

Furthermore, Canadian Solar has been witnessing healthy pricing for some orders in China. We can expect this Ontario, Canada-based company’s soon-to-be reported results to reflect improved revenues growth from this region.

However, according to management, the module average selling price, which has been trending lower over the last few quarters compared with earlier levels is expected to continue declining in the third quarter as well.

For the third quarter, our Consensus Estimate for earnings reflects a year-over-year decline of 10.3%.

Canadian Solar Inc. Price and EPS Surprise

Canadian Solar Inc. Price and EPS Surprise | Canadian Solar Inc. Quote

Earnings Whispers

Our proven model does not conclusively show that Canadian Solar will beat earnings this quarter. 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.

Zacks ESP: Canadian Solar has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 26 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Canadian Solar’s Zacks Rank #3 increases the predictive power of ESP but its Earnings ESP of 0.00% makes 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.

Recent Peer Releases

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 period, the company had reported earnings of 88 cents per share.

First Solar Inc. FSLR reported third-quarter 2017 adjusted earnings of $1.95 per share, beating the Zacks Consensus Estimate of 85 cents by a whopping 129.4%. The reported number also improved 60% from the prior-year figure of $1.22.

8point3 Energy Partners LP CAFD reported earnings of 27 cents per share in third-quarter fiscal 2017 (ended Aug 31), which missed the Zacks Consensus Estimate of 65 cents by 58.5%. The bottom line also declined 40.7% from 38 cents in the year-ago period.

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First Solar, Inc. (FSLR) : Free Stock Analysis Report
 
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8point3 Energy Partners LP (CAFD) : Free Stock Analysis Report
 
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