JinkoSolar Holding Co. Ltd. Earnings: Will Solar Shine Again?

JinkoSolar is working its way toward sustainable profitability. Will investors get what they want this quarter?

May 26, 2014 at 1:40PM

On Tuesday, JinkoSolar (NYSE:JKS) will release its quarterly report, and investors are hoping that the Chinese solar company can turn its stock around as conditions in the solar market improve. Rival Trina Solar (NYSE:TSL) jumped last week after a favorable earnings report, and JinkoSolar and fellow peer Yingli Green Energy (NYSE:YGE) expect dramatic improvements in their own results that could help reverse a share-price slide over the past several months.

Like Trina and Yingli, JinkoSolar is fighting in the Chinese solar industry, with years of money-losing efforts finally starting to give way to higher gross margins and the opportunity to create a sustainable profit. But the solar industry has always been volatile historically, with changing factors like national subsidies and trade restrictions constantly moving the playing field for JinkoSolar and its peers. Let's take an early look at what's been happening with JinkoSolar over the past quarter and what we're likely to see in its report.

Jks
JinChang solar plant. Source: JinkoSolar.

Stats on JinkoSolar

Analyst EPS Estimate

$0.40

Year-Ago EPS

($0.92)

Revenue Estimate

$288.68 million

Change From Year-Ago Revenue

54%

Earnings Beats in Past 4 Quarters

4

Source: Yahoo! Finance.

What's next for JinkoSolar earnings?
In recent months, investors have marked up their views on JinkoSolar earnings substantially, raising first-quarter estimates by a third and boosting full-year 2014 projections by almost $1 per share. The stock has moved in the other direction, though, falling nearly 20% since mid-February.

Initially, JinkoSolar stock seemed poised to soar, as JinkoSolar's fourth-quarter report sent the stock much higher. Revenue nearly doubled from year-ago levels and climbed 11.5% from the previous quarter, helping to lift net income by 60% sequentially. Shipment volumes remained positive, and with an extensive backlog of systems business and a strong balance sheet, JinkoSolar seemed to have a competitive advantage over Trina, Yingli, and other stocks in the Chinese solar sector.

Jks

Source: JinkoSolar.

Indeed, JinkoSolar's business appears to have held up better than those of its main rivals. Earlier this month, JinkoSolar reaffirmed its guidance for the first quarter and for the full 2014 year, continuing to expect module shipments of 440 to 470 megawatts for the quarter and 2,300 to 2,500 megawatts for the year. That stands in contrast to Trina Solar's and Yingli Green Energy's guidance changes that warned of lower module shipments than expected. Although the problems at Trina and Yingli could prove temporary, the fact that JinkoSolar has avoided them is a mark in its favor.

Yet JinkoSolar isn't immune to broader trends. Last month, analysts reduced their expectations of China's addition of solar capacity by half a gigawatt to 11.5 gigawatts, and the entire industry suffered. Still, as important as China is to JinkoSolar, it's not the only source of its recent strength, with solid demand globally helping to support the market.

Still, JinkoSolar continues to innovate. Just yesterday, the company released its Eagle+ solar-module series, with 275-watt peak power output and superior resistance to high temperatures and humidity levels. As other companies work on efficiency, JinkoSolar hopes to stay ahead of its peers and therefore capture more business from solar installation companies.

In the JinkoSolar earnings report, compare its results to what Trina Solar provided earlier this week. Ideally, companies will start distinguishing themselves from their peers in Chinese solar, and JinkoSolar looks poised to be one of the industry's winners going forward.

Three stock picks to ride America's energy bonanza
Record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, The Motley Fool is offering a look at three energy companies using a small IRS "loophole" to help line investor pockets. Learn this strategy, and the energy companies taking advantage, in our special report "The IRS Is Daring You To Make This Energy Investment." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

Click here to add JinkoSolar to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Dan Caplinger has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers