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First Solar slumps on 3Q and 2012 revenue outlooks

NEW YORK (AP) -- Shares of First Solar Inc. skidded Friday after the solar panel maker reported disappointing third-quarter revenue and lowered its sales estimate for the full year.

THE SPARK: First Solar reported its quarterly results after the market closed on Thursday. The company said its net income fell 55 percent because of restructuring costs, the completion of one project earlier in 2012, and scheduled reduced construction at another project.

The Tempe, Ariz., company said its net income fell to $87.9 million, or $1 per share, in the latest quarter. Excluding restructuring costs First Solar said it earned $1.27 per share. Revenue fell 17 percent, to $839.1 million from $1.01 billion.

Analysts were forecasting lower net income of $1.05 per share and greater revenue of $967.2 million, according to FactSet.

THE BIG PICTURE: First Solar said it now expects to report adjusted net income of $4.40 to $4.70 per share in 2012, up from its previous estimate of $4.20 to $4.70 per share. However it trimmed its revenue forecast to a range of $3.5 billion to $3.8 billion, down from $3.6 billion to $3.9 billion. First Solar said Superstorm Sandy disrupted its supply chains and some of its projects. It added that some sales may close in the first quarter of 2013 instead of the fourth quarter because of those disruptions.

Analysts were forecasting net income of $4.47 per share and $3.72 billion in revenue on average.

THE ANALYSIS: Cowen & Co. analyst Robert Stone said First Solar is expecting "much lower" profit margins in the fourth quarter than in the third quarter, and he said he thinks the company's backlog of orders is shrinking.

Raymond James analyst Pavel Molchanov concurred that the company got a strong profit margin boost in the third quarter, which will likely make First Solar the only solar cell maker to report a profit for the quarter. However he said the company will report greater revenue and lower margins in the fourth quarter.

SHARE ACTION: First Solar stock lost $2.26, or 9 percent, to $22.49 in afternoon trading. Based on Thursday's closing price, the shares have lost more than 50 percent of their value over the last year.