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First Solar (FSLR) Q3 Earnings Lag Estimates, Sales Down Y/Y

Zacks Equity Research

First Solar Inc. FSLR reported third-quarter 2019 adjusted earnings of 29 cents per share, missing the Zacks Consensus Estimate of $1.06 by 72.6%. The reported number, however, grew from the prior-year quarter’s loss per share of 18 cents.

Sales

First Solar’s sales of $546.8 million in the reported quarter missed the Zacks Consensus Estimate of $990 million by a massive 44.8%. Moreover, the top line declined 19.1% from the year-ago quarter’s $676.2 million.

Operational Highlights

In the third quarter, gross profit totaled $138.4 million compared to the gross profit of $129.1 million registered in the year-ago quarter.

Total operating expenses surged 37.4% to $97.1 million due to high selling, general and administrative; research and development; and production start-up expenses.

However, the company’s operating income at the end of third-quarter 2019 amounted to $41.3 million, reflecting a 29.4% decline from the operating income of $58.5 million in the year-ago quarter.

First Solar, Inc. Price, Consensus and EPS Surprise

First Solar, Inc. Price, Consensus and EPS Surprise

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

Financial Performance

First Solar had $879 million of cash and cash equivalents as of Sep 30, 2019, down from $1,403.6 million as of Dec 31, 2018.

Long-term debt totaled $452 million at the end of the third quarter compared with $461.2 million as of Dec 31, 2018.

2019 Guidance

First Solar updated its 2019 guidance, partially. The company maintains earnings expectations at $2.25-$2.75 per share. The Zacks Consensus Estimate for 2019 earnings, pegged at $2.36, lies below the midpoint
of the company’s projected range.

On the top-line front, the company maintains revenue expectations at $3.5-3.7 billion. The Zacks Consensus Estimates for 2019 sales, pegged at $3.54 billion, lies below the midpoint of the company’s projected view.

However, it lowered full-year operating expenses projection from $360-$380 million to $350-$370 million and increased gross margin expectation to 19-20% from 18.5-19.5%.

Meanwhile, First Solar maintains its shipment expectations at 5.4-5.6 gigawatts.

Zacks Rank

First Solar currently carries a Zacks Rank #5 (Strong Sell).

Upcoming Solar Releases

SolarEdge Technologies SEDG, a Zacks Rank #3 (Hold) stock, is slated to release third-quarter 2019 results on Nov 6. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Enphase Energy ENPH, a Zacks Rank #3 stock, is expected to release third-quarter 2019 results on Oct 29.

SunPower Corp. SPWR, a Zacks Rank #3 stock, is scheduled to release third-quarter 2019 results on Oct 30.

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