JinkoSolar Holding Beats on Q2 Earnings & Revenues, Up Y/Y - Analyst Blog

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JinkoSolar Holding Co., Ltd. ( JKS ) reported second-quarter 2014 non-GAAP earnings per American Depositary Share (ADS) of 80 cents (non-GAAP earnings of 20 cents per share), surpassing the Zacks Consensus Estimate of 69 cents by 15.9%. In the prior-year quarter, the company's adjusted earnings per ADS were 56 cents (non-GAAP earnings of 14 cents per share). The outperformance was primarily driven by higher revenues and a rise in total solar product shipments.

In the first quarter of 2014, the company's non-GAAP earnings per ADS were 20 cents (non-GAAP earnings of 5 cents per share).

Despite posting favorable earnings, JinkoSolar shares edged down 1.6% to $27.38 following the second quarter announcement possibly due to a sequential decline in the gross margin.

Total Revenue

In the quarter under review, JinkoSolar's total revenues of $392.1 million beat the Zacks Consensus Estimate of $386 million by 1.6%. On a year-over-year basis, the top line increased 37.8% primarily on the back of higher shipments and a rise in average selling prices (ASPs) of solar modules as well as electricity revenues from solar projects.

Quarterly total revenues improved 21.1% sequentially due to a rise in shipments for the solar modules.

Quarterly Highlights

In the second quarter of 2014, total solar product shipments stood at 659.5 megawatts (MW), up 34.8% year over year primarily due to higher shipments of solar modules, silicon wafers and solar cells. In the first quarter, JinkoSolar's total shipments were 581.2 MW.

Second-quarter gross profit climbed 76.6% year over year to $88.7 million mainly due to stepped up operating efficiency as well as higher ASPs. Steady cost curtailment for polysilicon and auxiliary materials also led to the upside.

Gross margin in the quarter was 22.6% versus 17.7% in the year-ago quarter. In the first quarter 2014, the company's gross margin was 24%. The sequential drop in gross margin was primarily due to a marginal decline in solar module ASPs.

JinkoSolar's total operating expenses shot up 89.4% year over year to $48.1 million, primarily due to higher selling and marketing, general and administrative as well as research and development expenses.

In the second quarter, income from operations was $40.6 million compared with $25.4 million a year ago.

The company incurred $11.5 million as interest expenses, up 22.3% 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 Jun 30, 2014, JinkoSolar had cash and cash equivalents of $159.9 million versus $73.9 million as of Jun 30, 2013.

Long-term borrowings as of Jun 30, 2014 were $144 million compared with $62.4 million as of Jun 30, 2013.

Guidance

JinkoSolar provided third-quarter 2014 total solar module shipment guidance in the range of 800-850 MW.

For 2014, the company expects total solar module shipments in the band of 2.9-3.2 gigawatts (GW).

JinkoSolar raised its total project development guidance for 2014 to 600 MW from the previous estimate of 400 MW, considering the growth in its downstream business and the positive impacts of new partnerships.

Other Company Releases

Canadian Solar Inc. ( CSIQ ) reported second-quarter 2014 earnings of 95 cents per share, reversing its year-ago loss of 29 cents per share and beating the Zacks Consensus Estimate of earnings of 58 cents.

ReneSola Ltd. ( SOL ) reported earnings per ADS of 1 cent in the second quarter of 2014, reversing the year-ago loss of 24 cents per ADS. The Zacks Consensus Estimate was a loss of 15 cents per ADS.

SunPower Corporation ( SPWR ) reported second-quarter 2014 adjusted earnings per share of 22 cents, missing the Zacks Consensus Estimate by 5 cents. Quarterly earnings also decreased 48% year over year.

Zacks Rank

JinkoSolar currently carries a Zacks Rank #4 (Sell).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ADS , CSIQ , SOL , JKS , SPWR

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