Seeking Alpha

First Solar still off sharply as earnings dissected. Peers rally anyway.

  • With 17 of the 20 analysts covering First Solar (FSLR -11.5%) holding neutral or bearish stances going into the company's Q4 report, little sympathy is being shown in response to a big Q4 miss and soft Q1 guidance.
  • Goldman (Sell, PT lowered to $42 from $45) continues to see a "lack of upside in First Solar's utility-scale model." The firm points to checks showing a "challenging U.S. growth outlook for large-scale utility projects," mixed performance in emerging markets, and the lack of a near-term yieldco spinoff/IPO for First Solar's solar projects (SunEdison recently filed for one).
  • Goldman also thinks First Solar's ability to hit a 1:1 book-to-bill at the end of 2013 was accompanied by a mix shift towards lower-margin module orders.
  • Morgan Stanley is pleased with First Solar's cost-cutting moves, but also thinks investors are counting on "a large degree of profitable international growth," which it considers "highly uncertain." Cowen expects gross margin to be down 450 bps Q/Q, but also notes Q1 guidance "may not be indicative of full-year results."
  • In spite of First Solar, peers are turning in a strong day (TAN +4.1%). The Street's positive response to SunEdison's Capital Markets Day could be helping.
  • Notable gainers: SCTY +6.6%. CSIQ +8.4%. DQ +6.9%. JKS +4.2%. JASO +3.5%. ENPH +4.1%.

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Comments (9)
  • benitus
    , contributor
    Comments (2136) | Send Message
    Well, say all that you like or don't like about FSLR, but it's up from below $49.50 pre-market to a high of $52.86 at this time, so I think that support for FSLR is still pretty strong, as it should, which may carry it back to $55 or higher in no time. Go FSLR.
    26 Feb 2014, 12:45 PM Reply Like
  • livinloud10
    , contributor
    Comments (2) | Send Message
    What are you talking about? There were less then 500,000 shares pre-market traded. Today's volume will be around 16MM. Alot of shares traded hands at it will be apparent soon, IMO. good luck if you're long.
    26 Feb 2014, 09:05 PM Reply Like
  • benitus
    , contributor
    Comments (2136) | Send Message
    livin....I'm flabbergasted. I don't know what you're talking about. Perhaps, you could explain yourself and I could attempt a reply. Thanks.
    26 Feb 2014, 10:18 PM Reply Like
  • Izzy1
    , contributor
    Comments (194) | Send Message
    SCTY Solar City is kicking butt It is up nearly 8% just today.
    26 Feb 2014, 01:32 PM Reply Like
  • tstreet
    , contributor
    Comments (942) | Send Message
    It seems like a shame that the utility scale business has not taken off because I don't this in the interest of the economy as a whole or the need to significantly penetrate the electricity production sector.


    Mandates that require a certain percentage of solar electricity by certain dates help but there is little incentive for utilities to ramp up if these standards can be largely met by individuals taking advantage of at least a 30% fed tax credit plus whatever state and local incentives they may have. It may be they see distributed solar as a lower cost way to meet their goals.
    26 Feb 2014, 01:41 PM Reply Like
  • bill d
    , contributor
    Comments (1906) | Send Message
    Goldbrick says sell - time to back up the truck!
    26 Feb 2014, 01:57 PM Reply Like
  • tstreet
    , contributor
    Comments (942) | Send Message
    I sold most of my FSLR the day before yesterday to take profits that had occurred over the last month. Seemed like a good time to take some off the table regardless of the upcoming report. So, I do not want to sound like I am prescient. Just lucky in this case.


    I bought back a little in after hours yesterday which looks like a good move in the short term.


    Thus far, however, I don't see much good news in their reporting and wonder if FSLR is not a good investment going forward. Would need to see some compelling news or analysis before I would buy any more. The fact that they have come back a little today is not a good argument and doesn't provide a business case.
    26 Feb 2014, 02:38 PM Reply Like
  • benitus
    , contributor
    Comments (2136) | Send Message
    tstreet....well, you did good, getting out when you're ahead. Don't forget, when you're out, those trades are closed, so when you get back in, it's a new trade altogether. Otherwise, you would still be living in the past. Can't afford to do that. Too many things to do, so little time. Anyway, you could've reversed your positions when it went past $53 today. It's always good to be making profits whenever you can. A few small deals is easier to make than one huge deal. Be well and be safe, my friend.
    26 Feb 2014, 03:16 PM Reply Like
  • moreofthesame
    , contributor
    Comments (743) | Send Message
    I have never seen SA so quiet during solar earnings. JKS is reporting on Monday and so far not a single article. TSL on Tuesday and no article. Seems investors have lost interest in the solar sector.
    27 Feb 2014, 10:23 PM Reply Like
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