FSLR: 5 Things to Know About Ugly First Solar Earnings

The solar module manufacturer missed expectations big-time

First Solar (FSLR), the solar module manufacturer, was off to a solid start during the first half of the year or so, gaining almost 16% through yesterday’s close. Zoom out to the past 12 months, and shares of FSLR has posted an also-solid 35% gain.

fslr-first-solar-earningsThen came yesterday’s First Solar earnings report … and shares of FSLR stock lost a little bit of their luster. In Wednesday’s premarket trading, First Solar was off 3% to 4%.

Here’s everything that FSLR stock investors need to know about the news, including what in the First Solar earnings report had investors heading for the door.

  1. First Solar posted a monster earnings miss. The nitty gritty of the First Solar earnings report was as follows: Revenue for the last three months tallied $544.4 million vs. expectations of $807 million. That translated to earnings of 4 cents per share — a mere fraction of the 33 cents per share FSLR stock analysts had slated.
  2. But the company claims the full-year forecast is just fine. Sure, First Solar did cut its full-year production forecast to 1.8-1.9 gigawatts (GW) from 1.9-2.0 GW. But according to CEO Jim Hughes, the company still is on track financially and reaffirmed its full-year EPS. Then again, even before the miss analysts were expecting a pretty significant decline in full-year First Solar earnings — namely, $2.70 per share vs. $4.35 a year ago.
  3. Expenses are going to ratchet up, though: FSLR also noted that it expects operating expenses to rise to between $380 million and $395 million from $365 million to $385 million.
  4. Investors weren’t impressed … and were likely expecting more after last quarter’s earning blowout. Another reason FSLR stock investors may have gotten so spooked is because the solar company was coming off an eye-popping earnings beat. In the previous quarter, First Solar earnings came in nearly double the analyst forecast.
  5. But First Solar stock should stay above its 200-day moving average. The good news, though, is that First Solar stock hasn’t yet broken the $60 mark, although they’ve been close. That’s important, as the $60 mark is the stock’s 200-day moving average, and a mark that InvestorPlace expert Serge Berger pointed to as an important base from a near- to medium-term perspective heading into the report.

As of this writing, Robert Martin did not hold a position in any of the aforementioned securities. 

Article printed from InvestorPlace Media, https://investorplace.com/2014/08/first-solar-earnings-fslr-stock-2/.

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