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What's in the Cards for First Solar (FSLR) in Q2 Earnings?

First Solar, Inc. FSLR is set to report second-quarter 2020 results on Aug 6, after market close.

In the last reported quarter, the company delivered an earnings surprise of 254.17%. However, it lagged the Zacks Consensus Estimate in three of the trailing four quarters, the average negative surprise being 211.52%.

Factors to Consider

Although at the onset of the second quarter, the company was forced to operate at lower capacity due to the coronavirus pandemic, in May, the company’s entire manufacturing workforce returned. Its second facility in Ohio is likely to have returned to full capacity in the second quarter. Such capacity expansion is expected to have boosted the company’s revenues in the soon-to-be-reported quarter.

The Zacks Consensus Estimate for second-quarter sales is pegged at $526.6 million, which indicates a 10% rise from the year-ago quarter’s reported figure.

First Solar, Inc. Price and EPS Surprise

First Solar, Inc. Price and EPS Surprise

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

Partial shutdown at the onset of the second quarter and expected delays in shipments, owing to the coronavirus impact,might have had an adverse impact on the company’s quarterly bottom line.

Nevertheless, First Solar’s consistent efforts to reduce cost-per-watt related to the Series 6 modules, led by improved research and development (R&D) and the CuRe program, are likely to have offset the negative impacts.
Notably, during the months of March and April, the company’s capital utilization was more than 100%. We expect a similar trend to have continued in the months of May and June as well. This must have also had a favorable impact on second-quarter results.

The Zacks Consensus Estimate for the company’s second-quarter earnings is pegged at 25 cents per share, implying a significant improvement from loss of 18 cents in the year-ago quarter.

Earnings Whispers

Our proven model predicts 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.

Earnings ESP: The company’s Earnings ESP is +93.55%. 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.

Upcoming Solar Releases

Canadian Solar CSIQ carries a Zacks Rank #2 and is set to release second-quarter results on Aug 7.

ReneSola SOL carries a Zacks Rank #3 and is expected to post second-quarter 2020 results soon.

JinkoSolar Holdings JKS carries a Zacks Rank #3 and is projected to post second-quarter 2020 results soon.

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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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