Canadian Solar Inc. (NASDAQ:CSIQ) will release its first quarter 2014 financial results before the market open on Friday, May 16, 2014. On the same day, management will hold a conference call at 8:00 a.m. U.S. Eastern Time to discuss the Company's first quarter of 2014 results and its business outlook.
Wall Street anticipates that the alternative energy company will earn $0.12 per share for the quarter, which is $0.22 better than last year's loss of -$0.10 per share. iStock expects Canadian Solar to fall short of Wall Street's consensus number, the iEstimate is -$0.10.
Sales, like earnings, are expected to rise, exploding 63.9% year-over-year (YoY). CSIQ's consensus revenue estimate for Q1 is $431.98 million, a whole lot more than last year's $236.61 million.
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Canadian Solar designs, develops, and manufactures solar wafers, cells and solar module products that convert sunlight into electricity for a variety of uses. Its products include a range of solar modules built to general specifications for use in a range of residential, commercial and industrial solar power generation systems.
In a preliminary announcement, management upped guidance for the first quarter. "The Company expects its revenue to be in the range of $460 million to $470 million, compared to previous guidance which was in the range of $415 million to $430 million. The Company also expects its gross margin to be in the range of 14% to 15% compared to its previous guidance which was in the range of 14%-16%."
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According to Schaeffer's Investment Research, somebody (or many) is expecting a mighty move from CSIQ. Schaeffer's Options Center writes, "The most active strike of the session [Tuesday] was CSIQ's July 33 call, where all of the 1,364 contracts traded did so on the ask side. Implied volatility ticked higher, and open interest rose the most of any strike overnight, collectively pointing to buy-to-open activity. With CSIQ trading at $27.63, the equity would need to surge more than 19% for the calls to move into the money. As such, delta on the option is docked at 0.34, suggesting a roughly 1-in-3 chance of an in-the-money finish at the close on Friday, July 18, which is when the calls expire."
Unfortunately for the options player(s), Canadian Solar EPS-driven price-sensitivity has been mostly to the downside. The stock has lost ground in the days surrounding 12 of the last 16 quarterly checkups. On average, CSIQ slid -9.41% with a minimum loss of -0.8% and a max fall of -25.20%.
Meanwhile, investors pulled out buy tickets four of the last 16 as a positive response to earnings news, including two of the last three. The stock advanced anywhere from 3.8% to 9.3% for the quartet of EPS announcements that pleased Wall Street.
Overall: Much of the surprise has been taken out of Canadian Solar Inc. (NASDAQ:CSIQ) Friday earnings release due to management's earlier guidance. It is doubtful EPS alone, based on the past four years, will be enough to make option bulls happy. However, a second dose of a better than expected outlook from management might offer a fighting chance.
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