FSLR

Solar manufacturer First Solar (click ticker for report: ) saw its shares tumble after the firm posted terrible gross margins during its first quarter. Revenue jumped 52% year-over-year, but fell 30% sequentially to $755 million, which was slightly ahead of consensus estimates. Earnings were several cents short of consensus expectations at $0.66, but the measure was still much better than the same period a year ago in which First Solar took a restructuring charge. Cash flow generation was relatively weak as the company posted $19.7 million in free cash flow, down from $253.3 million in the prior quarter. The big issue for First Solar came from the cost side of the equation. CFO Mark Widmar spoke to the issue of … Read more

For more than 18 months, Valuentum has been bearish on the future of the solar industry, with First Solar (click ticker for report: ) being a name we’ve carefully avoided. Shares went parabolic Tuesday afternoon, jumping over 40% at one point. CEO Jim Hughes also delivered some positive commentary about First Solar’s cost-per-watt pathway (below 40 cents in the near-future) and “off-grid” electricity sales potential. During its analyst day, the firm also provided much more bullish financial guidance than the Street had forecasted. First Solar anticipates full-year revenue of $3.8 billion to $4 billion to drive earnings per share of $4.00-$4.50. Operating cash flow is expected to be $800 million to $1 billion, but that matters little, in our view, … Read more

Tuesday afternoon, the struggling solar firm First Solar (click ticker for report: ) announced fourth quarter results. Revenue grew 63% year-over-year to $1.1 billion, falling well short of consensus estimates. Earnings, adjusted for restructuring charges, swung to a profit of $2.04 per share, roughly in line with consensus estimates. Gross margins were significantly higher than the year ago period at 27.3%, but were down 110 basis points sequentially. Module manufacturing costs were 11% lower than a year ago at $0.66 per watt. First Solar’s most-efficient facility achieved costs as low as $0.64 per watt, but it remains to be seen if these costs are low enough to compete on a global scale. Regardless, management provided one of the most bearish … Read more

First Solar’s second quarter results were stronger than expected, but we still do not like the solar industry.

First Solar posted another disappointing loss. Though our intermediate-term outlook on the company is slightly better, we continue to expect further downside in the firm’s shares.

After the market closed Tuesday, First Solar (FSLR) reported poor results yet again. The company posted a surprise loss of $4.78 per share in the fourth quarter due to a $393 million non-cash impairment charge, $164 million in excess warranty costs, and $60 million labeled as restructuring expenses. We think that all three of these items are red flags for long-term holders of the firm. Specifically, the first of these events signals that the firm overpaid for previous acquisitions and the third represents the possible need for a new strategy. We continue to expect the firm’s shares to trade lower. The second item, the $164 million worth of warranty charges, bothers us the most. We think such charges translate into the view that … Read more

First Solar (FSLR), a company we have been bearish on, came out with downwardly revised fourth quarter and 2012 guidance this week, sending shares down nearly 20%. Things have been a mess at First Solar. Solar overcapacity is still tremendous, and thanks to government subsidies, it’s nearly impossible for any US company to be the low-cost provider. Our previous fair value on the stock was $31 per share, assuming inflation-like growth in 2012 and earnings of $4.76 per share, far lower than $7.42 Street consensus. It’s been very clear to us that the solar industry is going through an almost textbook economic cycle, and not the part that’s good for generating excess returns on invested capital. At first, a few big … Read more