Why First Solar Crushed Q4 Earnings

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First Solar, Inc. (NASDAQ: FSLR) reported its most recently quarterly results after markets closed on Tuesday. The company said that it had $1.24 in earnings per share (EPS) and $480 million in revenue, which compares to consensus estimates from Thomson Reuters that are calling for $0.97 in EPS and $412.76 million in revenue. The fourth-quarter from last year had $1.60 in EPS and $942.32 million in revenue.

The fourth quarter was impacted by pre-tax charges of $729 million, primarily related to previously announced restructuring actions.

Net income decreased versus the prior quarter as a result of lower net sales, higher restructuring charges and an increase in tax expense, partially offset by an increase in equity in earnings.

In terms of guidance for the coming year, the company expects to see EPS in the range of flat to $0.50 and revenues in the range of $2.8 billion to $2.9 billion. The consensus estimates are calling for $0.41 in EPS and $2.53 billion in revenue.

On the books, cash and marketable securities at the end of the fourth quarter decreased slightly to $2.0 billion from $2.1 billion in the prior quarter.

Mark Widmar, CEO of First Solar, commented:

Despite the difficult restructuring decisions that we undertook in the fourth quarter, we ended the year with strong operational results. Our best line exited the quarter running above 16.9% conversion efficiency, and for the full year our fleet averaged 16.4% efficiency, an 80 basis point improvement over the prior year. From a financial perspective we delivered full year non-GAAP earnings per share of $5.17, exceeding our guidance for the year. We ended the year with $1.8 billion of net cash and are well positioned as we move forward with our Series 6 transition.

Shares of First Solar closed Tuesday up 5% at $36.62, with a consensus analyst price target of $34.38 and a 52-week trading range of $28.60 to $74.29. Following the release of the earnings report, the stock was initially up 2.4% at $37.50 in the after-hours trading session.