The company attributed the soft revenue figure due to timing of system sales and early implementation of 2011 pricing. In short, it likely began honoring discounts sooner than expected. While this was offset by an increase in volume, this underscores the notion that solar prices are falling.
As far as the 2011 profit guidance, that was raised to a range of $9.25 to $9.75 EPS from its prior forecast of $8.75 to $9.50 EPS. Revenue guidance was trimmed from the highs to $3.7 billion to $3.8 billion in annual revenue versus a December forecast for revenues to be $3.7 billion to $3.9 billion for 2011. The company reiterated a $1.0 billion to $1.1 billion cap-ex budget and sees operating cash flow of $1.0 billion to $1.1 billion.
While good demand visibility is present for 2011 from a broader geographic client base, First Solar shares were already pricing in the good news. The stock had closed out 2010 at $130.14 and shares closed today at $164.68. It was of little surprise to see shares down as much as 6.6% at $157.10 in the after-hours session on Thursday as a sell-the-news mentality was taking hold.
For whatever it is worth, First Solar is still above the consensus analyst price target of $157.22 from Thomson Reuters.
JON C. OGG
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