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First Solar develops solar power technology, with the goal of making it a cost-effective, alternative to conventional energy resources. The company sells Photovoltaic(PV) Modules to commercial power plants and utility companies.
First Solar takes part in the entire life-cycle of its products, from creation to collection and recycling. The company is headquartered in Tempe, Arizona and has a market cap of $17 billion.
On August 18th First Solar unveiled plans to expand its manufacturing and development plant in Perrysburg, Ohio. The 500,000 square foot expansion is expected to boost production to an annual output of 192 megawatts.
First Solar will be adding a fourth production line, similar its other plant layouts, similar to the other plants in Germany and Malaysia. Completion is expected during the second quarter of 2010 and will add more than 130 jobs.
Outstanding Growth Rates
Most of the most recent estimates have been up and currently annual growth rates for 2008 are currently 138%. The PEG ratio remains attractive, near 1.07x.
A Zacks analysts just released a new research report on First Solar, which reiterated the buy recommendation. The six-month target price is still $300 per share. Read Full Report Here.
Solid Quarterly Results
On July 30th First Solar announced second-quarter results included earnings of 85 cents per share, up from 57 cents per share in the previous quarter. The results topped the consensus estimate of 59 cents per share. The surprise was the fourth positive earnings surprise in the last four quarters, with each beating the consensus estimate by more than 20%.
Revenue was $267 million, up 35% from the previous quarter and a year-over-year increase of 345%. The consensus earnings estimate for the full-year of 2009 is now $6.97 per share, up from $5.85 within the 60 days.
Many in the industry are worried that excess growth in the industry could cause manufacturers to cut prices, deteriorating profits. However, First Solar currently has contracts through 2012, for $5.9 billion.
Shares of FSLR remain volatile, mostly due to business risk, but is showing support near $200 per share. The sell off in early September was driven by market woes and excess supply concerns that could drive solar prices down. Take a look at the chart below.
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