What's in the Cards for First Solar (FSLR) in Q3 Earnings?
First Solar, Inc. FSLR is set to report third-quarter 2020 results on Oct 27, after market close.
In the last reported quarter, the company delivered an earnings surprise of 40.00%. It surpassed the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 48.48%.
Let's take a closer look at the factors likely to have influenced the company’s performance.
Factors Under Consideration
First Solar has been witnessing strong demand for its Series 6 modules amid a challenging economic environment affected by the COVID-19 pandemic. As a result, the company had a strong Series 6 production rate and fleet-wide capacity utilization of more than 100% in July. Anticipating similar trends to have continued in the following two months of the third quarter, our hopes for First Solar’s revenues remain high.
Meanwhile, in August, the company’s Luz del Norte power plant in Chile secured approval from Coordinador Eléctrico Nacional, for delivering ancillary grid services on a commercial basis. This might have enabled the company to earn service revenues from this plant during the to-be-reported quarter.
Moreover, at the end of the July-September quarter, the company introduced its IQ 7A microinverters in the markets of Australia and Europe, which also reflects its capability to boost the quarterly top line.
In line with the aforementioned developments, the Zacks Consensus Estimate for third-quarter sales is pegged at $707.7 million, which suggests a 29.4% rise from the year-ago quarter’s reported figure.
First Solar had a strong beginning to the third quarter due to excess capacity utilization, which enables it to reduce cost-per-watt related to the Series 6 modules. Such lower cost-per-watt along with limited incremental severance costs expected during the second half of the year can be anticipated to have boosted the company’s overall gross margin in the third quarter. This is likely to have favorably impacted the bottom-line performance during the soon-to-be-reported quarter.
The Zacks Consensus Estimate for third-quarter earnings is pegged at 63 cents per share, indicating a surge of 117.2% year over year.
Earnings Whispers
Our proven model predicts an earnings beat for First Solar this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: The company’s Earnings ESP is +45.52%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: First Solar currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
First Solar, Inc. Price and EPS Surprise
First Solar, Inc. price-eps-surprise | First Solar, Inc. Quote
Upcoming Solar Releases
Enphase Energy ENPH carries a Zacks Rank #3 and is set to release third-quarter 2020 results on Oct 27.
SunPower Corporation SPWR sports a Zacks Rank #1 and is set to release third-quarter 2020 results on Oct 28.
Sunnova Energy International NOVA carries a Zacks Rank #3 and is set to release third-quarter 2020 results on Oct 29.
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First Solar, Inc. (FSLR) : Free Stock Analysis Report
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