First Solar: Thriving in a Pioneering Industry

First Solar, Inc. (FSLR) recently announced second-quarter revenue of $267 million, over three times its revenue from the second quarter of 2007. The company was also selected to build two of the largest solar PV plants in California.

Company Description

First Solar develops solar power technology, with the goal of making it a cost-effective alternative to conventional energy resources. The company sells Photovoltaic [PV] Modules to commercial power plants and utility companies. First Solar takes part in the entire life-cycle of its products, from creation to collection and recycling. The company is headquartered in Tempe, Arizona and has a market cap of $22.4 billion.

Another Strong Quarter

On July 30th First Solar announced second-quarter results included earnings of 85 cents per share, up from 57 cents per share in the previous quarter. The results topped the consensus estimate of 59 cents per share. The surprise was the fourth positive earnings surprise in the last four quarters, with each beating the consensus estimate by more than 20%.

Revenue was $267 million, up 35% from the previous quarter and a year-over-year increase of 345%. The consensus earnings estimate for the full-year of 2009 is now $6.55 per share, up from $5.85 within the last week.

Contract with California's Biggest Electric Utility Company

First Solar announced that Southern California Edison has chosen the company to design and supply a 2 megawatt system for a commercial building in Fontana, California. The proposed plant will be the largest rooftop plant of its kind in California and is already under construction. Souther California Edison plans to install 250 megawatts of solar capacity over the next five years.

The company will also build and maintain a new plant in Blythe, California in 2009. The PV power plant will have capacity of at least 7.5 megawatts, which could increase to 21 megawatts. It will be the largest ground-based PV plant in California.

Striving in a Pioneering Industry

The company boasts a profit margin of 27.3%, in an industry that averages -46.8%. First Solar's projected 5-year growth rate is 47.5%, well above its the industry average of 31.6%. The company has a Zacks Rank of #1 and is the top-rated alternative energy company.

The Chart

Shares of First Solar have recently traded sideways, after dropping from the 52-week high of $317.00, set in early May. The stock is consolidating and continues to pressure a key level of resistance at $290.00. Take a look at the chart below.

Comments

[Gumby:]

If government had started lavishing billions into solar energy back in 1980s, we would look foolish by now as solar had evolved a lot since then. Solar is still evolving and is still too expensive. Just dont go on a limb about solar, yet. The cost is falling and still falling along with better technology for longer duration. The best green alternative for now is simply energy conservation which is a great but intangible value . Nobody is making money on energy conservation but will otherwisely save money which is the really same and opposite thing..

2008 Aug 06 01:16 PM

[Salty:]

You don't mention that if government had provided a constant push into research and development of solar, the progress may have been much greater, and we wouldn't be in such a muckle now.

2008 Aug 06 02:51 PM

[sunguy:]

Gumby? No one is making money in conservation? Tell that to Toyota...Prius sales are through the roof.

2008 Aug 06 06:05 PM

[DesignerGirl:]

Stock is narrow for a big splurge upwards...hang on

2008 Aug 07 01:33 PM

[Guiding.God:]

Update that chart with today's close please....

2008 Aug 08 04:09 PM

[iggyDalrymple:]

Salty wrote, "You don't mention that if government had provided a constant push into research and development of solar, the progress may have been much greater...."

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Yeah, like throwing money at public education and the "War on Cancer" has really helped.

Iggie

2008 Aug 14 11:28 AM

[Investutopia:]

When Nanosolar implements a succesful manufacturing and marketing program First Solar will be shorted and Nanosolar will be the next big solar company. Go to my site for more information, <investutopia.com>;

2008 Aug 20 10:58 PM