On Mar 10, 2014, we issued an updated research report on
First Solar Inc.
). The largest U.S. solar panel manufacturer recently reported
weak fourth quarter 2013 results due to lower revenues,
specifically systems business project revenues.
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This solar behemoth ported fourth quarter earnings of 89 cents
per share, which missed the Zacks Consensus Estimate by 11% and
came in 56.4% lower than the year-ago earnings. Revenues also
dropped 29% year over year and fell short of the Zacks Consensus
Estimate by 21.1%. Lower business project revenue was the primary
reason for this huge miss.
First Solar also came up with a weak first quarter 2014 guidance.
For the said quarter, it expects revenues in the range of $800.0
million to $900.0 million. Earnings per share are expected
between 50 cents and 60 cents for the first quarter 2014, down
from the sequentially preceding quarter.
First Solar's numbers look particularly pale in contrast to other
solar peers especially when this renewable source is breaking out
as the most happening thing in energy today after two years of a
That said, the company accomplished several key objectives during
2013, including additional bookings of approximately 1.7
gigawatts of solar projects and manufacturing cost cuts. Average
module manufacturing costs at its main plant dropped 17% to 53
cents per watt in the fourth quarter of 2013 (excluding
underutilization and upgrades) from 64 cents per watt in the
fourth quarter of 2012.
First Solar also completed its first utility-scale project in the
Middle East, the largest operating solar photovoltaic plant in
the region. The Topaz plant - the biggest U.S. solar farm with
over 300 megawatt (MW) in operation - is also expected to be
complete this year. Additionally, Desert Sunlight will be
completed in 2015. Going forward, these initiatives would
continue to strengthen the company's position and improve
Presently, China, Japan and the U.S are driving demand for solar
panels. Solar majors - comprising polysilicon manufacturers and
panel makers - active in Asia are expected to gain traction as
the industry oversupply position shrinks.
Though First Solar is facing intense competition, it will be able
to develop economically sustainable businesses due to its
established expertise in other areas of the solar value chain,
such as, project development and engineering, procurement and
Key Picks from the Sector
First Solar currently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks in the industry include Zacks Rank #1
(Strong Buy) peer
Canadian Solar Inc.
) and Zacks Ranked #2 (Buy)
JinkoSolar Holding Co., Ltd.