JinkoSolar Holding Co., Ltd. (JKS) reported third-quarter 2014 non-GAAP earnings per American Depositary Share (ADS) of $1.36 (non-GAAP earnings of 34 cents per share), well ahead of the Zacks Consensus Estimate of 71 cents by 91.5%. However, reported earnings were in line with the year-ago figure. The upbeat performance was primarily driven by higher revenues and a rise in total solar product shipments.
In the second quarter of 2014, the company’s non-GAAP earnings per ADS were 80 cents (non-GAAP earnings of 20 cents per share).
Despite favorable earnings, JinkoSolar shares edged down 2.85% to $22.86 following the third quarter announcement as the company failed to meet the top-line expectation.
Total Revenue
In the quarter under review, JinkoSolar’s total revenues of $417.3 million were short of the Zacks Consensus Estimate of $445 million by 6.2%. On a year-over-year basis, the top line increased 30.5% primarily on the back of higher shipments as well as electricity revenues from solar projects.
Total revenues improved 5.3% sequentially due to a rise in solar module shipments.
Quarterly Highlights
In the third quarter of 2014, total solar product shipments stood at 708.2 megawatts (MW), up 36.5% year over year primarily due to higher shipments of solar modules, silicon wafers and solar cells. In the second quarter, JinkoSolar’s total shipments were 659.5 MW.
Third-quarter gross profit climbed 20.4% year over year to $86.1 million mainly due to stepped up operating efficiency. Steady cost curtailment for polysilicon and auxiliary materials also led to the upside.
Gross margin in the quarter was 20.6% compared with 22.3% in the year-ago quarter. In the second quarter 2014, the company’s gross margin was 22.6%. The sequential as well as year–over-year decline in gross margin was primarily due to lower ASPs.
JinkoSolar’s total operating expenses shot up 49.3% year over year to $47 million, primarily due to higher selling and marketing, general and administrative as well as marketing expenses.
The company incurred $11.9 million as interest expenses, up 29.8% year over year mainly due to expenses related to additional long-term bank borrowings for downstream solar projects in the reported quarter.
Financial Condition
As of Sep 30, 2014, JinkoSolar had cash and cash equivalents of $340.7 million, up from $75.3 million as of Dec 31, 2013.
Long-term borrowings as of Sep 30, 2014 were $152.9 million compared with $59.8 million as of Dec 31, 2013.
Guidance
JinkoSolar provided fourth-quarter 2014 total solar module shipment guidance in the range of 1,030–1,120 MW. For 2014, the company expects total solar module shipments in the band of 2.9–3.2 gigawatts (GW).
JinkoSolar expects 600 MW of total project development in 2014 on the back of its downstream business.
Other Company Releases
China-based solar cell and module producer JA Solar Holdings Co. Ltd. (JASO) posted strong third-quarter 2014 results, reversing its year-ago loss as its shift to focus on solar modules instead of cells paid off. The company recorded non-GAAP earnings of 21 cents per ADS in the third quarter of 2014, beating the Zacks Consensus Estimate of 15 cents by 40% and increasing 50% sequentially. In the year-ago period, it had incurred a loss of 36 cents per ADS.
ReneSola Ltd. (SOL) is scheduled to release its third-quarter 2014 results on Nov 26, 2014. The Zacks Consensus Estimate is pegged at 5 cents per ADS.
Yingli Green Energy Holding Co. Ltd. (YGE) is slated to release its third-quarter 2014 results on Nov 25, 2014. The Zacks Consensus Estimate is pegged at a loss of 13 cents per ADS.
Zacks Rank
JinkoSolar currently carries a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment