Salesforce and JinkoSolar Earnings Preview

Salesforce earnings due on August, 20

A fresh report from the analysis outlet Trefis underlines that the gross profit margin for the cloud software business has been shrinking since 2011. The Trefis report valued Salesforce at $65 a share, lower than its current market price. Salesforce stock closed Friday at 72.99, up 2.2%.

“We believe that the decline in Salesforce’s gross margin is due to its heavy investments in new data centers, which is leading to increasingly higher depreciation allocated to its cost of goods sold,” Trefis said. “This view is underpinned by the fact that Salesforce’s depreciation as a percentage of revenue has steadily increased from 3% in calendar 2008 to 8% in calendar 2014.”

Similar concerns were highlighted by D.A. Davidson analyst Jack Andrews about the company’s marketing cloud business.

“While customer enthusiasm and engagement seemed high, quantifiable metrics around deal flow, attach rates associated with various clouds, and other market data were hard to ascertain,” Andrews wrote at the time.

For fiscal Q3, analysts expect EPS of 18 cents, up 38.5%, on sales of $1.68 billion, up 23%. Moreover, the outlook for Salesforce is much more assured than that of its rivals: Oracle has missed forecasts five of the last six quarters while SAP has missed four of the last six. Microsoft has been more reliable but only slightly, missing two of the last six quarters’ earnings projections.

Andrews is more upbeat than average about the company’s prospects for the rest of the fiscal year. He sees 22.3% growth in revenue to $6.6 billion and adjusted earnings of 74 cents a share. Analyst consensus calls for earnings of 71 cents a share and revenue of $6.55 billion. Salesforce has offered EPS guidance of 69 cents to 71 cents, on revenue of $6.52 billion to $6.55 billion.

JinkoSolar earnings due on August, 20

JinkoSolar Holding Company Limited (NYSE:JKS): 4 Brokerage firm Analysts have agreed with the mean estimate for the short term price target of $34.13 in JinkoSolar Holding Company Limited (NYSE:JKS). Anyway, the stock price could fluctuate by $ 4.91 from the estimate as it is suggested by the standard deviation reading. The higher estimate has been put at $40 price target with the lower price estimate is calculated at $28. As many as 5 brokerage firms have rated JinkoSolar Holding Company Limited (NYSE:JKS) at 1.4. Research Analysts at Zacks have ranked the company at 3, suggesting the traders with a rating of hold for the short term.

Institutional Investors own 34.1% of Company shares. During last 3 month period, -2.77% of total institutional ownership has changed in the company shares. The 52-week high of the share price is $34.77 and the company has a market cap of $686 million, while the 52-week low of the share price is $16.1. JinkoSolar Holding Co., Ltd. has lost 4.58% in the last five trading days and dropped 14.89% in the last 4 weeks. JinkoSolar Holding Co., Ltd. has dropped 23.61% during the last 3-month period. Year-to-Date the stock performance stands at 11.92%.

Chinese vertically integrated solar company JinkoSolar has just signed two large loan agreements with the Export-Import Bank (Ex-Im Bank) China for the further development of its long-term solar assets and Malaysian production facility. The terms of the agreement stipulate that $62 million will be used to support JinkoSolar’s fixed and long-term assets, with some of the monies from this loan also going towards mid-term working capital at the Malaysia plant. A more immediate loan of RMB50 million ($8 million) will be used to support near-term working capital at the facility.

According to JinkoSolar CEO Kangping Chen, the agreement with Ex-Im Bank is indicative of industry confidence in the JinkoSolar brand, and will help to support the company’s globalization strategy.