JinkoSolar (JKS) Q4 Earnings Miss Estimates, Revenues Up Y/Y

JinkoSolar Holding Co., Ltd. JKS reported fourth-quarter 2019 earnings per American depositary share (ADS) of 96 cents, which missed the Zacks Consensus Estimate of $1.32 by 27.3%. However, the bottom line improved a solid 118.2% when compared with the year-ago quarter’s 44 cents.

For 2019, the company posted earnings per ADS of $2.79, which improved 83.6% when compared with the year-ago figure of $1.52.

Total Revenues

In the quarter under review, JinkoSolar’s total revenues of $1.37 billion improved 22.3% on a year-over-year basis from $1.12 billion. The upside can be mainly attributed to increased solar module shipments.

For 2019, the company reported revenues worth $4.27 billion, compared with $3.64 billion posted in 2018.

JinkoSolar Holding Company Limited Price, Consensus and EPS Surprise

JinkoSolar Holding Company Limited Price, Consensus and EPS Surprise

JinkoSolar Holding Company Limited price-consensus-eps-surprise-chart | JinkoSolar Holding Company Limited Quote

Quarterly Highlights

In the fourth quarter, JinkoSolar’s total solar module shipments were 4,538 megawatts (MW), up 25.4% year over year from 3,618 MW. The shipment came slightly below the midpoint of the company’s recently updated guided range of 4.5 gigawatts (GW) to 4.6 GW.

The company’s total operating expenses rose 25.2% year over year to $160.3 million from $130.2 million. This increase stemmed from enhanced shipping costs as well as bad-debt provision on accounts receivable. Also, impairment loss on property, plant and equipment as a result of the company's technology transformation in the fourth quarter of 2019, contributed to the higher expenses.

The company incurred $12 million as interest expenses, up 11.1% year over year from $10.8 million due to increased borrowings and the cessation of interest capitalization on certain completed solar projects. Issuance of additional convertible senior notes in May 2019 also pushed up interest expenses in the fourth quarter.

As of Dec 31, 2019, the company's in-house annual mono wafer, solar cell and solar module production capacities were 11.5 GW, 10.6 GW (9.8 GW for PERC cells and 800 MW for N type cells) and 16 GW, respectively.

Financial Condition

As of Dec 31, 2019, JinkoSolar had cash and cash equivalents of $812.1 million, up from $451.6 million as of Dec 31, 2018.

Total interest-bearing debts as of Dec 31, 2019, were $1.93 billion, compared with $1.41 billion as of Mar 31, 2019.

Recent Business Developments

In November 2019, JinkoSolar delivered 950 MW of its ultra-high efficiency Cheetah 72 cells solar modules to be installed at different projects across Spain and Mexico. In the same month, the company supplied 300MW of its high energy density Tiger panels for an ultra-high voltage demonstration plant in Qinghai Province, China.

In December 2019, JinkoSolar supplied approximately 40 MW of its ultra-high efficiency Cheetah HC 60 solar modules to Obton. Moreover, the company signed an agreement with COSCO SHIPPING Lines (Greece) S.A. to use the Greek Port of Piraeus as a distribution hub for the shipment of its renewable energy products in Europe, and in particular for Greece, the Balkans and the EMEA region.

Q1 and Full-Year 2020 Guidance

The company expects total revenues for first-quarter 2020 in the range of $1-$1.08 billion. The Zacks Consensus Estimate for the same is pegged at $1.34 billion, which lies well above the company’s guided range.

Notably, JinkoSolar has provided guidance for its first-quarter performance taking into account the fact that outbreak of COVID-19 across China affected certain raw materials supply and logistics during the first quarter, causing some module shipments be postponed to the second quarter of 2020. To this end, it projects that approximately 400 MW to 500 MW of its solar module shipments in the first quarter will be postponed to the second quarter.

For the first quarter, JinkoSolar expects total solar module shipments of 3.4-3.7 GW.

However, the company expects COVID-19 to not have any material impact on its full-year performance and thus has reiterated its 2020 shipment guidance. For 2020, it projects total solar module shipments of 18-20 GW.

Zacks Rank

JinkoSolar currently carries a Zacks Rank #3 (Holds). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Solar Releases

First Solar FSLR reported fourth-quarter 2019 adjusted earnings of $2.02 per share, which missed the Zacks Consensus Estimate of $2.79 by 27.6%.

Enphase Energy ENPH reported fourth-quarter 2019 adjusted earnings of 39 cents per share, which surpassed the Zacks Consensus Estimate of 33 cents by 18.2%.

SolarEdge Technologies SEDG reported fourth-quarter 2019 adjusted earnings of $1.65 per share, which surpassed the Zacks Consensus Estimate of $1.30 by 26.9%.

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