First Solar (FSLR) to Report Q4 Earnings: What's in Store?

First Solar, Inc. FSLR is set to report fourth-quarter 2020 results on Feb 25, after market close.

In the last reported quarter, the company witnessed an earnings surprise of 141.67%. In the trailing four quarters, First Solar delivered earnings surprise of 102.06%, on average.

Let's take a closer look at the factors likely to influence the company’s upcoming quarterly results.

Factors to Consider

Robust demand for its Series 6 modules is expected to have boosted First Solar’s fourth-quarter shipments, thereby bolstering its revenues. In fact, the company has been witnessing capacity utilization of more than 100% for this product, particularly across its international factories, in the recent times. Anticipating similar trends to have continued during the fourth quarter, our hopes for First Solar’s revenues remain high.

First Solar, Inc. Price and EPS Surprise

First Solar, Inc. Price and EPS Surprise

First Solar, Inc. price-eps-surprise | First Solar, Inc. Quote

However, potential delays in the closure of the company’s self-developed Sun Streams 2 project sale might have had an adverse impact on its fourth-quarter results.

On the cost front, it is imperative to mention that excess capacity utilization at almost all its factories, except the new Malaysia factory enables First Solar to reduce cost-per-watt related to the Series 6 modules. This might have contributed favorably to its quarterly earnings performance.

However, in the third quarter, First Solar incurred an impairment loss of $17 million for certain module manufacturing equipment, including framing and assembly tools no longer compatible with its long-term Technology Roadmap. Also, unforeseen COVID-19 impacts driven logistics costs has been affecting its gross margin count.

These might have had an adverse impact on the company’s overall earnings growth in the soon-to-be-reported quarter.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.27 per share, indicating a decline of 37.1% year over year.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for First Solar this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But this is not the case here.

Earnings ESP: The company’s Earnings ESP is -4.54%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: First Solar currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Recent Solar Releases

Enphase Energy ENPH reported fourth-quarter 2020 adjusted earnings of 51 cents per share, which surpassed the Zacks Consensus Estimate of 40 cents by 27.5%.

SolarEdge Technologies SEDG reported fourth-quarter 2020 adjusted earnings of 98 cents per share, which surpassed the Zacks Consensus Estimate of 87 cents by 12.6%.

Upcoming Solar Release

Sunrun RUN is set to release fourth-quarter 2020 results on Feb 25.

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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 Nasdaq, Inc.

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