What Awaits Yingli Green Energy (YGE) in Q2 Earnings?

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Yingli Green Energy Holding Company Limited YGE, better known as Yingli Green Energy, is scheduled to report second-quarter 2016 results before the opening bell on Aug 23. Last quarter, the company posted a positive earnings surprise of 161.86%. Let’s see how things are shaping up for this announcement.

Factors to Consider

Yingli Green Energy expects PV module shipments (including shipments to its own downstream PV projects) in the second quarter of 2016 in the range of 630 MW to 660 MW, compared to its previous guidance of 580–620 MW. Net profit margin is expected to be 2.5–3.5%.

However, Yingli Green Energy expects total revenue to suffer due to lower average selling price of PV modules in the to-be-reported quarter. Consequently, gross margin is projected to be in the 17–19% band, compared to the prior expectation of 18–20%.

YINGLI GREEN EN Price and EPS Surprise

 

YINGLI GREEN EN Price and EPS Surprise | YINGLI GREEN EN Quote

Earnings Whispers

Our proven model does not conclusively show that Yingli Green Energy is likely to beat estimates 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. But that is not the case here, as you will see below.

Zacks ESP: The 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 are pegged at a loss of 30 cents.

Zacks Rank: Although Yingli Green Energy’s Zacks Rank #3 increases the predictive power of ESP, its 0.00% ESP makes a positive surprise uncertain this season.

Note that we caution against stocks with a Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Peer Releases

First Solar Inc. FSLR reported second-quarter 2016 earnings of 87 cents a share, beating the Zacks Consensus Estimate of 58 cents by 50%.

SolarCity Corp. SCTY posted adjusted loss of $2.32 per share in the second quarter of 2016, narrower than the Zacks Consensus Estimate of a loss of $2.43.

Canadian Solar Inc. CSIQ reported second-quarter earnings of 68 cents per share, beating the Zacks Consensus Estimate of 40 cents by 70%.

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