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.

JinChang solar plant. Source: JinkoSolar.

Stats on JinkoSolar

Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$288.68 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


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.


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.

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