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First Solar (FSLR) to Report Q2 Earnings: What's in Store?

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First Solar, Inc. (FSLR - Free Report) is scheduled to report second-quarter 2018 results, after the market closes on Jul 26. Last quarter, the company delivered a positive earnings surprise of 1,660%.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Realizing the increasing demand for its Series 6 modules in the expanding U.S. solar market, First Solar has been significantly ramping up production of these modules, lately. In April 2018, the company began the first commercial shipments of these modules.

However, rising operating expenses associated, with increased production of Series 6 modules, are expected to weigh on the company’s earnings in the to-be reported quarters. In line with this, the Zacks Consensus Estimate for First Solar’s second-quarter earnings is pegged at 7 cents per share, reflecting an annual decline of 89.1%.

In terms of revenues, the company has been witnessing lower average selling prices (ASPs) for its modules lately, which, in turn, have been a drag on its revenues. Although management expects ASPs to improve in the remaining quarters of 2018, considering the global statistics for module prices, a total rebound seems to be inconceivable, at least in the near term.

While project sales tend to boost the company’s quarterly sales, such declining ASPs are expected to create a hurdle for its revenue growth. In line with this, the Zacks Consensus Estimate for First Solar’s second-quarter revenues is pegged at $479.3 million, reflecting an annual decline of 23.11%.

First Solar, Inc. Price and EPS Surprise

First Solar, Inc. Price and EPS Surprise | First Solar, Inc. Quote

Earnings Whispers

Our proven model does not show earnings beat for First Solar this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: First Solar has an Earnings ESP of -141.18%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: First Solar’s Zacks Rank #4 (Sell), when combined with a negative ESP, makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few operators in the Utility space that you may consider, as our model shows that they have the right combination of elements to deliver an earnings beat this quarter:

Sunrun Inc. (RUN - Free Report) will report second-quarter results on Aug 9. The company has an Earnings ESP of +22.76% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

SunPower Corporation has an Earnings ESP of +56.18% and a Zacks Rank #3. The company is expected to report second -quarter results on Jul 30.

AES Corp. (AES - Free Report) has an Earnings ESP of +3.01% and a Zacks Rank #3. The company is scheduled to report second-quarter results on Aug 7.

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