First Solar Beats on Earnings, Ups Guidance - Analyst Blog

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First Solar Inc. ( FSLR ) reported strong first quarter 2014 earnings of $1.10 per share, comfortably surpassing the Zacks Consensus Estimate of 50 cents per share by 120.0%.

Quarterly earnings also increased 66.6% from the year-ago profit of 66 cents per share.

Revenue

First Solar's revenues for the quarter climbed 25.8% year over year to $950.2 million. The top-line figure beat the Zacks Consensus Estimate of $840.0 million by 13.1%.

The significant year-over-year improvement was attributable to a solid solar project business. The timing of revenue recognition from First Solar's 139-megawatt (MW) Campo Verde Solar Project, located in Imperial County, CA boosted first quarter 2014 revenues noticeably.

However, this was partially offset by lower revenue recognition from the 550 MW Desert Sunlight project.  

Operational Highlights

Gross profit in the reported quarter was $236.7 million, up 39.8% year over year.

Total operating expenses decreased 9.9% year over year to $97.4 million during the first quarter due to a 21.2% decline in selling, general and administrative expenses.

Operating income of $139.3 million was up a significant 127.5% from the year-earlier quarter.

In the first quarter 2014, the company's net interest expense declined 45.3% due to lower long-term debt. Long-term debt was $138.2 million at the end of the first quarter 2014 compared with $162.8 million as of Dec 31, 2013.

Financial Performance

First Solar had $975.2 million of cash and cash equivalents as of Mar 31, 2014, down from $1,325.1 million at year-end 2013. Long-term debt (including current portion) decreased to $198.9 million from $223.3 million at year-end 2013.

2014 Guidance Upgraded

First Solar has lifted its 2014 financial guidance on the back of strong earnings delivered in the first quarter.

For 2014, the company has increased its earnings per share guidance range to $2.40 to $2.80 per share from its prior forecast of $2.20 to $2.60 per share.

For the year the company expects operating income of $290 million to $340 million, higher than the prior guidance of $270 million to $320 million

The operating cash flow guidance range of $300 million to $500 million has been increased from $250 million to $450 million.

Other Upcoming Releases

JA Solar Holdings Co., Ltd. ( JASO ) is scheduled to release its first quarter earnings on May 8. The Zacks Consensus Estimate is currently at 8 cents.

ReneSola Ltd. ( SOL ) is scheduled to release its first quarter earnings on May 15. The Zacks Consensus Estimate is currently at a loss of 5 cents.

Canadian Solar Inc. ( CSIQ ) is scheduled to release its first quarter earnings on May 27. The Zacks Consensus Estimate is currently at 7 cents.

Our Take

First Solar easily surpassed our expectation in the first quarter, thanks to higher sales and its ability to meet financial and operational targets.

The solid start to the year supported by new bookings encouraged First Solar to lift its guidance for 2014.

However, First Solar faces intense competition from manufacturers of crystalline silicon solar modules and other types of solar modules and PV systems. So, if the peers come out with better quality PV products it can impact the company's competitive position in the solar industry.

First Solar presently has a Zacks Rank #3 (Hold).



CANADIAN SOLAR (CSIQ): Free Stock Analysis Report

FIRST SOLAR INC (FSLR): Free Stock Analysis Report

JA SOLAR HOLDGS (JASO): Free Stock Analysis Report

RENESOLA LT-ADR (SOL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: CSIQ , FSLR , JASO , SOL

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