Daqo New Energy (DQ) Earnings and Sales Miss Estimates in Q2

Daqo New Energy (NYSE:DQ) Corp. DQ logged earnings of $3.03 per share for second-quarter 2021, up from 3 cents in the year-ago quarter. Earnings for the reported quarter lagged the Zacks Consensus Estimate of $3.29.

The leading producer of high-purity polysilicon registered revenues of $441.4 million for the quarter, up more than three-fold year over year. It, however, missed the Zacks Consensus Estimate of $462 million.

Sales were driven by higher year over year average selling price (“ASP”) and sales volumes. The company witnessed strong customer demand for polysilicon during the reported quarter.

DAQO New Energy Corp. Price, Consensus and EPS Surprise

DAQO New Energy Corp. price-consensus-eps-surprise-chart | DAQO New Energy Corp. Quote

Volumes and Prices

Polysilicon production volume for the second quarter was 21,102 metric tons (MT), up around 17% year over year. Sales volume was 21,060 MT for the quarter, up roughly 12% year over year.

Polysilicon ASP was $20.81 per kg for the reported quarter, up nearly three-fold year over year.

Financial

The company ended the quarter with cash and cash equivalents of roughly $227.1 million, up around 157% year over year. Long-term debt was roughly $70.9 million at the end of the quarter, down around 39% year over year.

Net cash provided by operating activities was $442.3 million for the six months ended Jun 30, 2021, compared with $47 million for the year-ago period.

Outlook

Moving ahead, Daqo New Energy expects to remain in full utilization in the second half of 2021 with sales volumes similar to production volumes. The company raised its full-year polysilicon production guidance to the band of 83,000-85,000 MT from the prior view of 81,000-83,000 MT. It also expects the strong pricing momentum to continue in the second half of 2021.

Price Performance

Shares of Daqo New Energy have surged 91.5% over a year compared with the industry’s rise of 21.2%.

Image Source: Zacks Investment Research

Zacks Rank & Key Picks

Daqo New Energy currently carries a Zacks Rank #3 (Hold)

Some better-ranked stocks worth considering in the basic materials space include Nucor Corporation (NYSE:NUE) NUE, ArcelorMittal (NYSE:MT) MT and AdvanSix (NYSE:ASIX) Inc. ASIX, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Nucor has a projected earnings growth rate of 489.2% for the current year. The company’s shares have surged around 164% in a year.

ArcelorMittal has an expected earnings growth rate of 1,731.2% for the current year. The company’s shares have shot up around 193% in the past year.

AdvanSix has an expected earnings growth rate of around 160.4% for the current year. The company’s shares have gained roughly 149% in the past year.

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