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Nov. 4, 2013, 12:56 PM
- Positive Q3 guidance revisions from Canadian Solar (previous) and Daqo (DQ +11.2%) are fueling another massive rally in solar stocks, some of which jumped last Friday thanks to blowout Q3 numbers from First Solar (FSLR +4.6%).
- Canadian hiked the midpoint of its Q3 module shipment guidance range by more than 10%, and the midpoint of its gross margin guidance range by 800 bps. Daqo has upped its polysilicon shipment range to 1,200-1,275 MT from a prior 1,000 MT, albeit while slightly lowering its wafer shipment guidance to 6.5-6.6 MT from prior 6.8 MT (shipping delays are blamed).
- The guidance hikes follow a string of positive Q2 reports from Chinese solar firms in August, as companies saw both their sales and margins benefit from growing local demand, diminishing overcapacity, and strong shipments to the high-margin Japanese market. Credit Suisse recently predicted improving demand could lead excess Chinese supply to evaporate by late 2014 or 2015.
- Also: Suntech (STP +13.6%) has officially reached a deal to sell its large and bankrupt Wuxi, China unit to solar cell maker Shunfeng (previous), SunPower (SPWR +10.9%) has announced it's buying module cleaning robot developer Greenbiotics, and SolarCity (SCTY +16.4%) has announced (as part of its seemingly non-stop financing binge) it's selling $54.4M in solar asset-backed notes maturing in Dec. 2026.
- Today's winners, aside from the aforementioned companies: JKS +9.8%. JASO +9.2%. RSOL +8.3%. LDK +6.5%. HSOL +5.2%. YGE +7.4%. CSUN +6%. SOL +6.9%. SUNE +3.5%. TSL +9.7%.
- Solar ETFs: KWT, TAN
Nov. 1, 2013, 12:47 PM
Nov. 1, 2013, 11:22 AM
- A solid majority of analysts covering First Solar (FSLR +15.5%) have maintained neutral ratings for a while, even as shares took off as part of a broader solar rally, and none have issued upgrades following the company's huge Q3 beat and mixed full-year guidance.
- Deutsche (Hold) estimates early revenue recognition for the Desert Sunlight project provided a $0.15 Q3 EPS boost, and that a lower tax rate and operational improvements provided a $0.25 boost. The firm sees "limited upside to 2014 estimates."
- Needham (Hold) offers a similar take: It's encouraged by First Solar's cost improvements and rising bookings, but is worried about the potential for lower 2014 earnings and "uncertainty" regarding 2015 growth.
- First Solar mentioned on its CC (transcript) its core module cost/watt ($0.49) is the "lowest in the industry" following a big Q3 drop - the company's cost advantage has been narrowing in recent years as polysilicon prices crash - and that it's testing modules with a 14.1% conversion efficiency; average Q2 efficiency was 13.3%, and lead-line efficiency 13.9%. Ont the other hand, First Solar says it's seeing a "lower system ASP environment."
- 16.8% of the float was shorted as of Oct. 15; that's probably assisting with today's rally. Also higher: CSIQ +7.2%. GTAT +6.3%. RSOL +8.9%. YGE +3.7%. SUNE +2.4%. SOL +3.6%.
- Update (12:35 PM): First Solar finally catches an upgrade: S&P has lifted shares all the way to Buy from Sell.
Nov. 1, 2013, 9:13 AM
Oct. 31, 2013, 5:50 PM
Oct. 31, 2013, 4:51 PM
- First Solar (FSLR) is trading near its October highs following its big Q3 beat.
- While systems sales are taking center stage in Q3 report, the performance of First Solar's module ops also improved. Module production (exc. German plant closures) rose 10% Q/Q and 8% Y/Y to 426MW, cost/watt fell $0.08 Q/Q and Y/Y to $0.59, and conversion efficiency, which has historically trailed that of non-thin-film module vendors, rose 30 bps Q/Q and 60 bps Y/Y to 13.3%.
- Capacity utilization was 80% in Q3, +500 bps Q/Q but -600 bps Y/Y. The company's 2013 module-only shipment guidance range has been favorably narrowed to 400MW-500MW from 300MW-500MW.
- On the other hand, First Solar is now guiding for 2013 systems shipments of 1.2GW, down from a prior 1.3GW; that's the main reason for the revenue guidance cut. 50% of Desert Sunlight revenue is now set to be recognized this year, up from ~33%.
- First Solar ended Q3 with $1.5B in cash/investments, up from $1.3B at the end of Q2. Opex rose 19% Y/Y, less than rev. growth of 51%.
- More on First Solar
Oct. 31, 2013, 4:33 PM
- First Solar (FSLR) attributes its blowout Q3 in part to initial revenue recognition for its 550MW Desert Sunlight solar project (California), and from the sale of its 50MW ABW project (Canada).
- Also helping: Gross margin rose 170 bps Q/Q and 30 bps Y/Y to 28.8%. First Solar has hiked its full-year gross margin guidance range to 24%-26% from 22%-23%.
- Nonetheless, 2013 operating cash flow guidance has been lowered to $700M-$900M from $800M-$1B. Capex guidance has been lowered to $300M-$350M from $350M-$400M.
- Along with its Q3 results, First Solar announces it's selling its 250MW Silver State South project (Nevada, previous) to a NextEra Energy (NEE) unit. Terms are undisclosed.
- Expected future module shipments are now at 2.7GW, up from 2.2GW at the end of Q2 and 2.6GW at the end of 2012. 860MW of incremental bookings were achieved in Q3, partly offset by ~300MW of shipments.
- Expects future systems/module revenue is at $7.8B, up from $7.6B at the end of Q2 and down from $8B at the end of 2012. Potential opportunities stand at 7.7GW, down 300MW Q/Q.
- FSLR remains halted, shares resume trading at 4:35PM ET. SPWR +2% AH. SCTY +3.1%.
- Q3 results, PR, slides
Oct. 31, 2013, 4:11 PM
- First Solar (FSLR): Q3 EPS of $2.28 beats by $1.28.
- Revenue of $1.27B (+51% Y/Y) beats by $277M.
- 2013 revenue guidance range lowered to $3.4B-$3.6B from $3.6B-$3.8B (consensus is at $3.63B). 2013 EPS guidance range raised to $4.25-$4.50 from $3.75-$4.25 (consensus is at $3.77)
- Shares are halted, and will resume trading at 4:35PM ET. CC at 4:30PM. (PR)
Oct. 31, 2013, 4:05 PM
- First Solar (FSLR) has been halted in advance of its Q3 report.
Oct. 31, 2013, 12:10 AM
Oct. 30, 2013, 5:35 PM
Oct. 28, 2013, 12:15 PM
- Though the Nasdaq is only down 0.1%, many 2013 Internet, solar, and enterprise software high-flyers are diving once more. Chinese names are well-represented in the group, as NQ Mobile continues crashing thanks to fraud allegations and Sohu plunges due to weak Q4 EPS guidance.
- The WSJ and NYT have each run pieces asking whether a new tech bubble is afoot, at least in certain hot sectors. "People are reaching for growth," says one fund manager quoted by the WSJ. Others argue the fact the high-flyers generally have substantial revenue, and are often profitable, makes the current situation different from the Dot.com bubble.
- Internet decliners: FB -3.4%. MELI -2.8%. GRPN -5%. ZNGA -2.7%. P -2.4%. DANG -7.6%. VIPS -7%. YY -4.8%. QIHU -5.6%. RENN -5.7%. SINA -2.4%. FUEL -4%.
- Solar decliners: JKS -12.4%. FSLR -4.8%. SOL -8.4%. YGE -8%. JASO -6.9%. GTAT -5.4%. SUNE -4.6%. SPWR -4.3%. SCTY -3.8%. STP -8.9%. TSL -13.2%.
- Enterprise decliners: CRM -3.8%. DATA -4.5%. MKTO -5.8%. WDAY -4%. DWRE -3.4%. VEEV -5.1%. IMPV -3.4%.
- Recent declines: I, II.
- Previous: Cashin sees mobile/cloud bubble
Oct. 21, 2013, 3:19 PM
- First Solar (FSLR +7.3%), already +73% YTD and +127% in the past 12 months, soar again as J.P. Morgan analysts say FSLR is one of their top picks in the clean-tech sector along with EnerNOC (ENOC +0.8%) and SolarCity (SCTY -2.3%).
- The firm says it remains optimistic FSLR will be able to achieve its 2014-15 targets given at the recent Analyst Day; FSLR's pipeline appears more robust with recent contract wins and with projects that are held longer, resulting in higher margins.
Oct. 18, 2013, 2:28 PM
- Rumors Carl Icahn is set to disclose a stake in First Solar (FSLR +7.9%) have helped shares fly higher. Similar rumors popped up back in April.
- Several solar peers are also doing very well on what's proving a good day for momentum stocks. SPWR +4.9%. SUNE +5%. SCTY +7.5%. DQ +14.3%. CSIQ +4.8%.
- JinkoSolar (JKS +2.7%) is up more moderately after announcing a deal to develop a 120MW Chinese solar plant that will be built over the next three years. Shares jumped yesterday in response to a Credit Suisse upgrade.
- The Guggenheim Solar ETF (TAN +1.9%) is now up 152% YTD.
Oct. 16, 2013, 8:35 AM
- First Solar (FSLR) +1.9% premarket agrees to construct a 250 MW solar power plant in Riverside County, Calif., for a subsidiary of NextEra Energy (NEE).
- The McCoy Solar Energy Project is located near the 550 MW Desert Sunlight Solar Farm, jointly owned by a subsidiary of NEE, GE Energy and Sumitomo, currently under construction by FSLR.
- Construction on the new project is expected to begin in late 2014, with completion in late 2016.
Oct. 14, 2013, 2:06 PM
- SunPower (SPWR +5.2%), First Solar (FSLR +2.7%), and SunEdison (SUNE +3.4%) are all adding to the Friday gains they saw after SolarCity provided strong Q3 installation data and (more importantly) issued better-than-expected 2014 guidance. SolarCity is taking a breather following Friday's giant move higher.
- Last week's signing of a California solar bill that effectively allows solar power producers (residential or commercial) to sell back as much excess power to the grid as they generate (the bill could pave the way for similar legislation in other states) could also be providing a lift to industry sentiment.
- Short interests for the group remain high. SunPower had 27.7% of its float shorted as of Sep. 30, First Solar had 15.2%, and SunEdison 10%.
First Solar Inc is a provider of solar energy solutions. It designs, manufactures and sells PV solar modules with a thin-film semiconductor technology. It also manufactures crystalline silicon solar modules.
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