First Solar, Inc (FSLR) Information Technology - Semiconductors | Reports November 2, After Market Closes

Key Takeaways

• The Estimize consensus is calling for earnings per share of 79 cents on $987.90 million, 10 cents higher than Wall Street on the bottom line and $30 million on the top
• First Solar had been one of the few standouts in the solar industry but it looks like an industry wide pullback is starting to catch up to them
• Advanced stage projects such as the one signed with MCE yesterday are expected to drive top line growth for the remainder of 2016

The past few years have been nothing short of a roller coaster ride for the solar industry. All the efforts to promote solar energy and make it more accessible has not translated to financial success. This has only recently started to catch up to First Solar which had otherwise been a standout in the industry. Shares are down 29% in the past 12 months due to a pronounced slowdown impacting both the top and bottom line. Its widely believed those struggles will carry forward into the third quarter.

Analysts at Estimize are calling for earnings per share of 79 cents, 76% lower than the same period last year. That estimate has dropped nearly 20% in the past 3 months when First Solar more recently reported. Revenue for the period is forecasted to drop 21% to $987.90 million, marking the first period of negative growth since the FQ4 2015. Historically shares haven’t moved following an earnings report but given the current state of the solar industry, a sell off seems all but inevitable. 

Despite some of its recent woes, First Solar has made some impressive strides compared to other industry players like SolarCity and SunEdison. From a financial perspective, First Solar is one of the only solar companies that hasn’t consistently posted a loss. Its primary focus has been on large commercial markets where its competitors have been tied to less profitable residential and small commercial markets.

In the previous earnings call the company revealed that earnings would be lower in the third quarter following restructuring charges in the range of $15 to $20 million. Some of this should be offset by from the sale of large scale utility projects such as the one signed with MCE yesterday. These advanced stage projects will derive a large portion of revenue for the remainder 2016. First Solar robust pipeline and unique technology gives them the upperhand against its peers but an industry wide pullback doesn’t mean it won’t suffer. 

Photo Credit: Russ Ferriday