Norse
Active Member
Earnings preannouncements are just speculation on my part, but last quarter we had SOL and then TSL and YGE preannounce earnings.
Some companies gave, what I would call soft-ball guidance for Q3, so I wouldn't be surprised to see a pre-announcement. Some companies do it and some don't, I am not sure what the threshold is to preannounce.
JKS had a stellar Q2, but they did not preannounce, since they do not give gross margin guidance (which was their main reason for a beat) and only slightly exceeded their upper end MW shipment guidance. Nonetheless they had a great quarter.
CSIQ and SOL on the other hand do give gross margin guidance and they guided for 10%-12% and 7%-9% respectively.
SOL had 7.3% GM in Q2 on $0.63 ASP's and $0.53 avg. cost. They guided towards $0.66 ASP in Q3 and flat cost. According to math, their GM should go up by 5% if this ASP proves true, which will lead to 12% GM. If they also ship more modules than they guided for at the top end, then we might see another preannouncement. At the same time you don't want to preannounce every quarter, because then the market will start expecting it.
CSIQ on the other hand guided towards 10%-12% GM without any (high margin) power plant sales. They had 12.8% GM in Q2 with one power plant sale. In Q3 they will already have 2 power plant sales. This could lead to a 14% - 15% GM. I also expect them to have higher capacity utilitization rates than in Q2 (some capacity sat idle), which could increase GM by another 1%-2%. It is very likely that CSIQ will have highe ASP's in Q3, since all of the data points to rising ASP's for tier 1 Chinese solar panels. I am also hoping for some reduced costs as well. They also closed the sale of 2 power plants to Blackrock on the last day of Q3. I am not sure how these sales are accounted for on the books, but there has to be some significance to the Sep 30th. date, which the same date they closed the other 2 plant sales to TransCanada (these are accounted for on a cash basis).
All that being said, I wouldn't be surprised to see CSIQ with gross margins near 20% in Q3. Highly unlikely, but it is a realistic possibility.
CSIQ also guided towards 410MW - 430MW of module shipments in Q3, which sounds low to me since they had 455MW in Q2.
If I am correct in my assumptions, then I would expect the company to preannounce earings. Then again they guided towards 380MW - 420MW and 9%-11% GM in Q2 and delivered 455MW and 12.8% GM, with no preannouncement. IMO those numbers were not quite good for a preannouncement, especially since they probably knew they were going to lose $0.40 EPS on currency exchange (which will not happen in Q3 according to my research, possibly break even or maybe even slight positive). But if they reach the 15% - 20% GM in Q3 and deliver above the high end of their MW shipment estimate, then a preannouncement would be the rational thing to do.
This is all speculation on my part, so please do your own due diligence and do not rely on this information.
Thank you. CSIQ along with SPWR doing good atm, and with some good develepment in the debt ceiling issue I think they will both preform well today. OT: something is up with KNDI today.
