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First Solar (FSLR) Q3 Earnings & Revenues Beat Estimates

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First Solar Inc. (FSLR - Free Report) reported third-quarter 2020 adjusted earnings of $1.45 per share, which surpassed the Zacks Consensus Estimate of 60 cents by 141.7%. The reported figure also improved significantly from the prior-year quarter’s earnings of 35 cents.

The year-over-year improvement can be attributed to growth in net sales and favorable module segment gross margin.

Sales Update

First Solar’s sales of $927.6 million in the reported quarter exceeded the Zacks Consensus Estimate of $708 million by 31.1%. Moreover, the top line witnessed a 44.4% surge from the year-ago quarter’s $642.4 million, primarily due to international project sales and an increase in the volume of modules sold to third parties.

First Solar, Inc. Price, Consensus and EPS Surprise

First Solar, Inc. Price, Consensus and EPS Surprise

First Solar, Inc. price-consensus-eps-surprise-chart | First Solar, Inc. Quote

Operational Highlights

In the third quarter, gross profit totaled $293 million, which increased from $137.5 million reported in the year-ago quarter.

Total operating expenses slipped 0.8% to $85.9 million due to lower selling, general and administrative expenses along with absence of litigation losses.

Consequently, the company reported an operating income of $207.2 million compared with $50.9 million generated in the year-ago quarter. The upside can be primarily attributed to significantly higher net sales and gross profit in the quarter.

Financial Performance

First Solar had $1.28 billion of cash and cash equivalents as of Sep 30, 2020, down from $1.35 billion as of Dec 31, 2019.

Long-term debt totaled $220.5 million at the end of the third quarter compared with $454.2 million as of Dec 31, 2019.

2020 Outlook

First Solar earlier withdrew its 2020 guidance, given the uncertainty regarding the severity and duration of the COVID-19 pandemic. However, along with the third-quarter earnings press release, the company reinstated financial guidance for the fourth quarter of 2020 and provided full-year 2020 guidance based on its financial results through the third quarter 2020.

During the fourth quarter, the company aims to generate earnings in the range of $1.00-$1.50 per share on revenues worth $540-$790 million. The Zacks Consensus Estimate for earnings, pegged at $1.05 per share, lies below the mid-point of the company guided range. The Zacks Consensus Estimate for revenues, pegged at $818 million, lies above the company guided range.

For 2020, the company aims to generate earnings in the range of $3.65-$4.15 on revenues worth $2.6-$2.9 billion. The Zacks Consensus Estimate for earnings, pegged at $2.89 per share, lies below the company guided range. The consensus estimate for revenues, pegged at $2.69 billion, lies below the mid-point of the company guided range.

Moreover, First Solar expects 2020 module shipments to be 5.5-5.7 gigawatts (GW).

Zacks Rank

First Solar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Solar Releases

SolarEdge Technologies (SEDG - Free Report) holds a Zacks Rank of 2 at present and is scheduled to post third-quarter 2020 results on Nov 2.

Canadian Solar (CSIQ - Free Report) carries a Zacks Rank of 2 at present and will post third-quarter 2020 results soon.

A Recent Solar Release

Enphase Energy (ENPH - Free Report) came out with earnings of 30 cents per share for the third quarter, beating the Zacks Consensus Estimate of 24 cents per share.  

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