Why JinkoSolar's Shares Jumped

Why JinkoSolar's Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Chinese solar manufacturer JinkoSolar jumped as much as 15% today after reporting a surprise quarterly profit.

So what: Shipments of solar modules rose 44.5% from the first quarter to 489.2 MW, and revenue jumped 51.7% to $287.6 million. Gross margin leapt to 17.7% and net income was $8 million, or $0.36 per share. Management also increased full-year shipment guidance to 1.5 GW-1.7 GW from a previous range of 1.2 GW-1.5 GW.

Now what: Management also said there was a rush to buy and install solar panels in Europe before tariffs were put in place, but now that has subsided since a trade agreement was reached. The company is also benefiting from a growing systems business, which comes with higher margins than modules. The company's backlog is approaching 700 MW; of that, 200 MW-300 MW will be completed this year. Don't think that all Chinese solar manufacturers will be reporting profits this quarter because JinkoSolar is in a better strategic position, both from a business and balance sheet standpoint, than its competition.

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The article Why JinkoSolar's Shares Jumped originally appeared on Fool.com.

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