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First Solar (FSLR) Beats on Q3 Earnings, Updates Outlook

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First Solar Inc. (FSLR - Free Report) reported third-quarter 2016 earnings of $1.22 a share, beating the Zacks Consensus Estimate of 69 cents by a wide 76.8%. The reported number, however, declined 64.2% from the prior-year figure of $3.41.

Revenues

First Solar’s revenues of $688 million in the quarter missed the Zacks Consensus Estimate of $967 million by 28.8%. Revenues also declined 45.9% from the year-ago figure of $1,271.2 million. The decline is primarily attributable to the completion of multiple systems projects during the quarter, partially offset by higher module-only sales.
 

Operational Highlights

Gross profit in the reported quarter was $186.3 million, down from $484.4 million a year ago.

Total operating expenses increased 12.8% to $97.6 million, largely due to higher research and development expenses, selling, general and administrative expenses, and restructuring and asset impairment costs.

Operating income was $88.7 million, down from $397.8 million in the year-ago quarter.

FIRST SOLAR INC Price, Consensus and EPS Surprise

 

FIRST SOLAR INC Price, Consensus and EPS Surprise | FIRST SOLAR INC Quote

Financial Performance

First Solar had $1,414.2 million of cash and cash equivalents as of Sep 30, 2016, down from $1,126.8 million at 2015 end.

Long-term debt was $161.1 million at the end of the third quarter, compared with $251.3 million as of Dec 31, 2015.

2016 Guidance

First Solar has lowered its revenue guidance to the band of $2.8–$2.9 billion from $3.8–$4 billion projected earlier. However, it has raised the gross margin guidance to the range of 25.5–26% (18.5–19% guided earlier). The low end of the operating income guidance was raised to $340–$370 million ($310–$370 million projected previously). Meanwhile, the company has trimmed its operating cash flow guidance to reflect cash outflow of $100–$0 million band, compared to $500–$650 million predicted earlier.

The company lowered its panel shipment projection to the 2.8−2.9 GW band from 2.9−3.0 GW projected earlier.

Full-year earnings are now expected in the band of $4.30−$4.50 per share ($4.20−$4.50 estimated previously).

Quarterly Results at 8point3 Energy

8point3 Energy Partners LP , a limited partnership formed by First Solar and SunPower Corp. (SPWR - Free Report) , reported earnings of 38 cents per share in the third quarter of fiscal 2016 (ended Aug 31, 2016), missing the Zacks Consensus Estimate of 42 cents by 9.5%. The partnership reported net income of $15.9 million in the quarter, compared with $1.3 million in the year-ago period.

Upcoming Peer Releases

SunPower is slated to report third-quarter 2016 earnings on Nov 9.

ReneSola Ltd. (SOL - Free Report) is expected to release third-quarter results on Nov 15.

Zacks Rank

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

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