| Is Yingli Green (YGE) Set to Disappoint in Q3 Earnings? | |
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Yingli Green Energy Holding Co. Ltd. YGE or Yingli Solar is expected to report third-quarter 2015 results on Nov 24, 2015. Last quarter, the company posted a negative earnings surprise of 152.38%. Let’s see how things are turning out for the third quarter.
Factors Affecting This Quarter
Yingli Solar, one of the world’s leading solar panel manufacturers, has been struggling to survive amid a pile of debt. Importantly, the company has failed to generate profits since 2011. In this scenario, the company may find it difficult, if not impossible, to pay down its outstanding debt. This can lead to cross-defaults, putting it at liquidation risk.
Though Yingli Solar has made some progress on the debt front, with outstanding debt at the end of the second quarter declining to $332.9 million from $460.7 million as of Dec 31, 2014, it is still substantially indebted. The situation is further exacerbated by the company’s inability to report in the green for the past few quarters. Yingli Solar has recently paid back $110 million "from the liquidation of idle land and demolition of facilities," but it has little ability of remaining competitive in the long run. Moreover, the pressure on margins is definitely a concern.
The company will also register impairment charges in the third quarter of 2015 due to a lower-than-expected utilization ratio of some project facilities. Lower utilization is expected to continue into the fourth quarter. It has already started the process of performing a long-lived asset impairment analysis with respect to those production facilities.
Hence, Yingli Solar expects to realize a considerable amount of non-cash impairment charge on those production facilities in the third quarter of 2015, which will have a material adverse effect on its financial results for both the third quarter and the full year.
Earnings Whispers?
Our proven model does not conclusively show that Yingli Green Energy will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat consensus estimates. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because the Most Accurate estimate as well as the Zacks Consensus Estimate stands at a loss of 27 cents.
Zacks Rank: Yingli Green Energy’s Zacks Rank #3, which when combined with a 0.00% ESP, makes a beat less likely this season.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Q3 Peer Releases
Here are some stocks in the solar industry which have surpassed earnings estimates in the third quarter of 2015.
ReneSola Ltd. SOL reported earnings of 8 cents per American Depositary Share (“ADS”) in the third quarter of 2015. The Zacks Consensus Estimate was a loss of 5 cents.
JA Solar Holdings Co. Ltd. JASO posted third-quarter 2015 adjusted earnings of 68 cents per ADS, surpassing the Zacks Consensus Estimate of 29 cents by an impressive 134.5% and the year-ago figure by 240%.
JinkoSolar Holding Co. JKS reported third-quarter non-GAAP adjusted earnings of $1.04 per ADS, beating the Zacks Consensus Estimate of 95 cents by 9.47%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report JA SOLAR HOLDGS (JASO): Free Stock Analysis Report RENESOLA LT-ADR (SOL): Free Stock Analysis Report JINKOSOLAR HLDG (JKS): Free Stock Analysis Report YINGLI GREEN EN (YGE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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Yingli Green Energy Holding Co. Ltd.
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CODE : YGE |
ISIN : US98584B1035 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Yingli Green is based in China. Yingli Green is listed in Germany and in United States of America. Its market capitalisation is US$ 261.7 millions as of today (€ 224.0 millions). Its stock quote reached its highest recent level on May 15, 2009 at US$ 9.62, and its lowest recent point on November 30, 2012 at US$ 1.25. Yingli Green has 181 764 000 shares outstanding. |