We have long said that this Q3 period was likely to separate the men from the boys in the solar sector. Unfortunately, none of the men looked stronger than the boys. Tonight’s earnings report out of First Solar Inc. (NASDAQ: FSLR) only reiterates the notion that solar power companies are in many ways just leveraged bets on the price of oil. First Solar posted $1.79 EPS on $480.9 million in revenues (excluding the Sarnia project with $58 million not recognized in Q3). Thomson Reuters had estimates pegged at $1.74 EPS and $528.78 million in revenues. The company noted a cost per watt drop of 2.3%, but the gross margin dropped faster by 5.8%. And there are other reasons to be cautious here.
First Solar is roughly 11% of the key solar ETF in the Claymore/MAC Global Solar Energy (NYSE: TAN), and that is down 3.7% at $8.32 in the after-hours session. The Market Vectors Solar Energy ETF (NYSE: KWT) is much thinner in trading volume and is indicated lower without much volume, but First Solar is about 8.6% of its weighting. Many have hoped for a recovery in Energy Conversion Devices, Inc. (NASDAQ: ENER), but that is down almost 4% at $11.02 in the after-hours session and that is on the heels of a 4.5% drop during the normal trading session.
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Notwithstanding a solid fourth quarter and an up year, First Solar, Inc. (NASDAQ:FSLR) is off more than 15% in early trading this morning. We noted its 

