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Energy

First Solar Margin Pressure Trumps Earnings & Guidance (FSLR)

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By Jon C. Ogg Updated Published
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First Solar, Inc. (NASDAQ: FSLR) looked like a decent report, but there is a sell-the-news reaction taking place in the after-hours trading session.  The solar giant posted 16% higher earnings of $2.04 EPS versus $1.79 a year ago.  Revenues rose 66% to $797.89 million.  Thomson Reuters had estimates of $1.95 EPS and $778.76 million in revenues.

Earnings would have been $0.17 higher but the company took a $0.17 charge related to the repatriation of $300 million in profits brought in from a foreign subsidiary.

First Solar also raised its fiscal target to a range of $7.50 to $7.65 EPS from a prior range of $7.00 to $7.40 EPS; it also put revenue guidance at $2.58 to $2.61 billion from a prior $2.5 to $2.6 billion.  Thomson Reuters has estimates of $7.46 EPS and $2.58 billion in revenues.

The big issue here is its gross margin, which fell to gross margin in the quarter fell to 40.3% from above 50% a year ago.

First Solar closed up 0.5% at $151.15 on the day but the shares are trading down almost 6.5% at $141.40 in the after-hours session.

JON C. OGG

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About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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