Saturday, May 25, 2024

First Solar (FSLR) Stock Tumbles on Q3 Revenue Miss, Outlook

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First Solar (FSLR) late yesterday posted lower-than-expected 2016 third-quarter revenue and slashed its revenue guidance for the year.

NEW YORK (TheStreet) — Shares of First Solar (FSLR) were falling 13.07% to $35.28 on heavy trading volume mid-morning Thursday as the Tempe, AZ-based solar energy solutions provider late yesterday reported 2016 fiscal third-quarter revenue that was below analysts’ expectations and cut its full-year revenue forecast.

After yesterday’s closing bell, First Solar posted revenue of $688.0 million, well below Wall Street’s expected $985.4 million. The company said adjusted earnings were $1.22 per share, which surpassed analysts’ estimates of 75 cents per share.

First Solar reduced its full-year sales outlook to be in the range of $2.8 billion to $2.9 billion, down from its prior guidance of $3.8 billion to $4.0 billion.

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Adjusted earnings are expected to be between $4.30 and $4.50 per share vs. its previous estimates of $4.20 to $4.50 per share. First Solar said in a conference call yesterday that panel pricing impacted its third-quarter results, adding that the company passed on some opportunities because it “won’t chase pricing to the bottom.”

Oppenheimer, Roth Capital and Janney Capital subsequently downgraded First Solar’s stock to the equivalent of “neutral” from “buy.” Oppenheimer said it would prefer to stay on the sidelines pending First Solar’s strategic review, according to TheFly.

Roth Capital analysts also said they’re remaining cautious until visibility improves. First Solar has a path to improved margins, but it could take more than a year to achieve that, Roth Capital noted. Janney Capital said First Solar’s outlook has worsened amid “bad” potential bookings and weak module pricing.

More than 4.70 million First Solar shares have traded so far today vs. the 30-day average of 2.70 million.

Separately, TheStreet Ratings objectively rated this stock according to its “risk-adjusted” total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer’s view or that of this articles’s author.

The team rates First Solar as a Hold with a ratings score of C. The company’s strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, the team also finds weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins.

FSLR Chart

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