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Why First Solar Crushed Q4 Earnings

Chris Lange

First Solar, Inc. (FSLR) reported its most recently quarterly results after markets closed on Tuesday. The company said that it had $1.24 in earnings per share (EPS) and $480 million in revenue, which compares to consensus estimates from Thomson Reuters that are calling for $0.97 in EPS and $412.76 million in revenue. The fourth-quarter from last year had $1.60 in EPS and $942.32 million in revenue.

The fourth quarter was impacted by pre-tax charges of $729 million, primarily related to previously announced restructuring actions.

Net income decreased versus the prior quarter as a result of lower net sales, higher restructuring charges and an increase in tax expense, partially offset by an increase in equity in earnings.

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In terms of guidance for the coming year, the company expects to see EPS in the range of flat to $0.50 and revenues in the range of $2.8 billion to $2.9 billion. The consensus estimates are calling for $0.41 in EPS and $2.53 billion in revenue.

On the books, cash and marketable securities at the end of the fourth quarter decreased slightly to $2.0 billion from $2.1 billion in the prior quarter.

Mark Widmar, CEO of First Solar, commented:

Despite the difficult restructuring decisions that we undertook in the fourth quarter, we ended the year with strong operational results. Our best line exited the quarter running above 16.9% conversion efficiency, and for the full year our fleet averaged 16.4% efficiency, an 80 basis point improvement over the prior year. From a financial perspective we delivered full year non-GAAP earnings per share of $5.17, exceeding our guidance for the year. We ended the year with $1.8 billion of net cash and are well positioned as we move forward with our Series 6 transition.

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Shares of First Solar closed Tuesday up 5% at $36.62, with a consensus analyst price target of $34.38 and a 52-week trading range of $28.60 to $74.29. Following the release of the earnings report, the stock was initially up 2.4% at $37.50 in the after-hours trading session.

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