Earnings Preview for Canadian Solar

On Thursday, May 20, Canadian Solar CSIQ will release its latest earnings report. Check out Benzinga's preview to understand the implications.

Net Income, Earnings, And Earnings Per Share

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Sell-side analysts expect Canadian Solar's EPS to be near $0.41 on sales of $1.05 billion. Canadian Solar reported a profit of $1.84 per share when it published results during the same quarter last year. Sales in that period totaled $825.63 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to post earnings in line with the consensus estimate when it reports Thursday, EPS would be down 77.72%. Sales would be up 27.17% on a year-over-year basis. Here is how the company's reported EPS has compared to analyst estimates in the past:

Stock Performance

Shares of Canadian Solar were trading at $36.21 as of May 18. Over the last 52-week period, shares are up 91.34%. Given that these returns are generally positive, long-term shareholders are probably satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Canadian Solar is scheduled to hold the call at 08:00:00 ET and can be accessed here.