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Why is First Solar (FSLR) Down 8.9% Since its Last Earnings Report?

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A month has gone by since the last earnings report for First Solar, Inc. (FSLR - Free Report) . Shares have lost about 8.9% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is FSLR due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

First Solar Q1 Earnings and Revenues Top Estimates

First Solar reported first-quarter 2018 earnings of 78 cents per share, surpassing the Zacks Consensus Estimate of a loss of 5 cents, by a huge margin. The reported figure also improved from the prior-year quarter’s earnings of 9 cents per share.

Revenues

In the reported quarter, revenues came in at of $567.3 million, exceeding the Zacks Consensus Estimate of $405 million by 40.1%. However, the top line plunged 36.4% from the year-ago figure of $891.8 million.

Operational Highlights

Gross profit in the first quarter was $172.8 million, up 105.3% from $84.2 million a year ago.

Total operating expenses increased 6.9% to $98.5 million owing to higher production start-up expenses.

Operating income in the quarter totaled $74.3 million compared to operating loss of $8 million in the year-ago quarter.

Financial Performance

First Solar had $1,858.3 million of cash and cash equivalents as of Mar 31, 2018, down from $2,268.5 million at the end of 2017.

Long-term debt was $431.8 million at the end of the first quarter compared with $380.5 million at 2017-end.

2018 Guidance

First Solar reiterated its 2018 earnings guidance in the range of $1.50-$1.90 per share on revenues of $2.45-$2.65 billion. The company also maintained its panel shipment guidance in the band of 2.9-3.0 gigawatts.

Gross margin guidance was also reiterated in the range of 21.5-22.5% while adjusted operating income view were maintained in the band of $130-$180 million.

However, the company slashed its operating cash flow guidance from the band of $100-$200 million to $100 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There have been four revisions lower for the current quarter.

First Solar, Inc. Price and Consensus

 

First Solar, Inc. Price and Consensus | First Solar, Inc. Quote

VGM Scores

Currently, FSLR has a poor Growth Score of F, however its Momentum is doing a lot better with a B. The stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for momentum investors than value investors.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Interestingly, FSLR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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