First Solar Shares Plummet In Wake Of Slashed Revenue Guidance
Global and leading US solar PV supplier First Solar saw its shares tank nearly 20% after the company slashed its expected sales for the full-year 2016, and reported third quarter net sales down nearly $250 million from the prior quarter.
First Solar published its third quarter earnings report earlier this month, prior to the election of Donald Trump as the next President of the United States, a move which seems to have let the company avoid any of the similar market slumps its rivals suffered on the same news. However, that’s about where the good news ends, considering that the company’s shares tanked around 20% on the back of the company’s earnings and future guidance.
Net sales for First Solar’s third quarter were $688 million, down $246 million from the second quarter, and down a whopping 84% on net sales in the third quarter of 2015. The company attributed the slump to the completion of multiple systems projects during the quarter — though this itself was offset slightly by higher module-only sales. Earnings per share were $1.49, up significantly from $0.13 from the previous quarter. The company also found themselves affected by pre-tax charges of $4 million, related to previously-announced restructuring changes.
“In the third quarter our operational and financial results were solid,” said Mark Widmar, CEO of First Solar. “Our entire fleet module efficiency for the past quarter was 16.5% and our lead line efficiency exited the quarter at 16.9%, demonstrating continued execution on our technology roadmap. We are pleased with our current year financial performance; however, current market conditions are extremely challenging and require us to carefully assess our short and long-term strategic response.”
First Solar updated its 2016 guidance based on its lackluster third quarter results in tandem with the revised sale timing of the California Flats and Moapa projects, both of which are now expected to be sold in 2017. Subsequently, net sales for the year have been revised down from an original expectation of between $3.8 billion and $4 billion, down to between $2.8 billion and $2.9 billion. Expenses and operating income were also both modified, but only slightly, and earnings per share were revised from an expected $3.65 to $3.90 down to $3.75 to $3.90.
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