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First Solar (FSLR) to Post Q2 Earnings: What's in the Cards?

Zacks Equity Research

First Solar, Inc. FSLR is expected to report second-quarter 2019 results soon. In the last reported quarter, the company witnessed a negative earnings surprise of 392.31%. Furthermore, it has average four-quarter miss of 648.94%.

Why a Likely Positive Surprise?

Our proven model shows that First Solar is likely to beat earnings estimates this quarter. This is because the company has the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: First Solar has an Earnings ESP of +319.99%.

Zacks Rank: The company carries a Zacks Rank #3, which when combined with a positive Earnings ESP make us reasonably confident of an earnings beat.

First Solar, Inc. Price and EPS Surprise

First Solar, Inc. Price and EPS Surprise

First Solar, Inc. price-eps-surprise | First Solar, Inc. Quote

Factors Under Consideration

First Solar initiated production of Series 6 modules in its first factory last April. Since then, the company has set up and started production at three more factories. As a result, significant operational improvements across its Series 6 factories have been observed in recent months. This, in turn, has enabled the company to boost the production rate to meet the rising demand for these modules as increasing number of U.S. states and corporates are investing heftily in solar energy.  

Expectations of solid shipments of its modules along with the aforementioned developments are expected to boost First Solar’s top line in the soon-to-be-reported quarter. In line with this, the Zacks Consensus Estimate for the company’s second-quarter revenues is pegged at $689.4 million, implying a solid 122.9% improvement from the figure reported in the year-ago quarter.

Management expects cost per watt for the Series 6 modules, which increased the company’s expenses in the past couple of quarters, to decline beginning second-quarter 2019. We may expect this cost reduction to aid First Solar’s earnings growth in the quarter to be reported.

Furthermore, production ramp-ups leading to robust sales growth might provide a boost to the company’s bottom line. In line with this, the Zacks Consensus Estimate for second-quarter earnings is pegged at 2 cents, indicating 104.4% improvement from the year-ago quarter’s reported figure.

Upcoming Solar Releases

Enphase Energy ENPH sports a Zacks Rank #1 and is scheduled to report second-quarter 2019 results on Jul 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

Azure Power Global Ltd AZRE carries a Zacks Rank #2 and is expected to post first-quarter fiscal 2020 results on Aug 14.

SunPower Corporation SPWR carries a Zacks Rank #2 and is scheduled to release second-quarter 2019 results on Jul 31.

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