First Solar Inc. (FSLR Quick QuoteFSLR - Free Report) reported second-quarter 2016 earnings of 87 cents a share, beating the Zacks Consensus Estimate of 58 cents by 50%. The reported number also surged 67.3% from the prior-year figure of 52 cents per share on the back of higher sales and gross profits.

Shares of First Solar gained 3.1% during after-hours trading, following the announcement of second-quarter results.

Revenues

First Solar’s revenues in the quarter increased 4.3% year over year to $934.4 million. Growth is primarily attributable to higher revenues from module-only sales, sale of the Kingbird project and revenue recognition across multiple system projects. Reported revenues also came ahead of the Zacks Consensus Estimate of $904 million by 3.4%.

Operational Highlights

Gross profit in the reported quarter was $191.2 million, up from $164.5 million a year ago.

Total operating expenses increased 69.8% to $182.3 million, largely due to higher research and development expenses, along with restructuring and asset impairment costs.

Operating income was $8.9 million, down from $57.1 million in the year-ago quarter.

Financial Performance

First Solar had $916.7 million of cash and cash equivalents as of Jun 30, 2016, down from $1,126.8 million at 2015 end.

Long-term debt was $161.8 million at the end of the second quarter, compared with $251.3 million as of Dec 31, 2015.

2016 Guidance

First Solar reaffirmed its revenue guidance in the band of $3.8–$4 billion. However, it raised the low end of both the gross margin projection to the range of 18.5–19% (18–19% guided earlier) and the operating income guidance to $310–$370 million ($300–$370 million projected previously). Meanwhile, the company lowered the high end of its operating cash flow guidance to the $500–$650 million band from $500–$700 million expected earlier.

The company reiterated its panel shipment projection of 2.9−3.0 GW.

Full-year earnings are now expected in the band of $4.20−$4.50 per share ($4.10−$4.50 estimated previously).

Quarterly Results at 8point3 Energy

8point3 Energy Partners LP , a limited partnership formed by First Solar and SunPower Corp. (SPWR Quick QuoteSPWR - Free Report) , reported earnings of 27 cents per share in the second quarter of fiscal 2016 (ending May 31, 2016). The Zacks Consensus Estimate stood at a loss of 2 cents. The partnership swung into profit with a net income of $10 million in the reported quarter, from a net loss incurred in the year-ago period.

Upcoming Peer Releases

SunPower Corp. is slated to report second-quarter 2016 earnings on Aug 9.

SolarCity Corp. is scheduled to release its second-quarter numbers on Aug 9.

Zacks Rank

First Solar presently carries a Zacks Rank #3 (Hold).

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