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8point3 Energy (CAFD) Q3 Earnings Debut: Beat or Miss?

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8point3 Energy Partners LPCAFD is expected to report third-quarter 2015 results on Sep 30, 2015, after the closing bell.

8point3 Energy is a limited partnership formed by First Solar Inc. FSLR and SunPower Corp. SPWR to own and operate a portfolio of selected solar energy generation assets. The shares of 8point3 Energy Partners began trading on Jun 19, 2015.

Factors to Consider this Quarter

8point3's initial portfolio includes interests in 432 megawatt of solar energy projects with counterparties enjoying minimal credit risk. The projects are 87% utility scale with weighted average contract life of 22 years and no project-level debt.

The balance of the portfolio assets covers commercial/industrial and residential.

The formation of 8point3, the joint yieldco, was announced in late Feb 2015. Yieldcos own renewable energy generating assets and operations, and offer a lucrative option for investors by providing them with a low-risk return profile. Apart from being beneficial for investors, yieldcos also make it easier for renewable energy companies like First Solar and SunPower to raise funds for new projects.

The partnership's potential growth opportunities were supported by a 1,143 MW "Right of First Offer Portfolio or ROFO" and a 13.7 gigawatt development pipeline ranging from early-stage to advanced-stage development.

The sponsors, First Solar and SunPower, have entered into a ROFO Agreement with 8point3 under which the yieldco has the right of first offer on certain projects currently in their possession. The ROFO Portfolio represents only 8% of the current combined pipeline projects of the sponsors.

An yieldco can be defined as a dividend growth-oriented public company formed to hold operational assets, which produce an expected cash flow based on long-term power purchase contracts. Yieldcos are turning out to be a popular vehicle in the alternate energy space. In 2014, NRG Energy listed one of its subsidiaries, NRG Yield Inc. NYLD , which contains some natural gas and renewable production assets.

What Our Model Indicates

Our proven model does not conclusively show that 8point3 Energy is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for 8point3 Energy is 0.00%, as both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 14 cents.

Zacks Rank: 8point3 Energy currently carries a Zacks Rank #3, which when combined with an Earnings ESP of 0.00%, makes a surprise prediction difficult.

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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

FIRST SOLAR INC (FSLR): Free Stock Analysis Report

SUNPOWER CORP-A (SPWR): Free Stock Analysis Report

8POINT3 ENERGY (CAFD): Free Stock Analysis Report

NRG YIELD INC-C (NYLD): Free Stock Analysis Report

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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 Nasdaq, Inc.


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

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