Nov. 7, 2014, 10:54 AM
- First Solar (FSLR -10.3%) has dived towards $50 after missing Q3 estimates (if one excludes a $0.26/share one-time tax benefit) and lowering its full-year revenue guidance. Also not helping: First Solar disclosed on its CC (transcript) it's not pursuing a solar project YieldCo at this time.
- Nonetheless, the company does think "the ownership and operation of whole or partial interest in select solar-generating assets does have a role as a component part of [First Solar's] overall business model," and says it "likely will begin providing greater visibility into our retained ownership interest by reporting it as a separate segment commencing in 2015."
- When asked by a Baird analyst about the YieldCo decision, CEO Jim Hughes admitted First Solar has "a note of caution about the overall market position as we exit 2016 and move into 2017." Several other analysts also pressed the company about the various factors (growth expectations, cost of capital, taxes, etc.) that went into its YieldCo decision.
- UBS (Neutral) has lowered its 2015 EPS estimate by $0.35 to $5.00, citing opex growth and the potential for First Solar to retain equity interests in projects (rather than fully selling them). "We believe the market for solar assets has become more competitive and that the arb opportunity has tightened."
- Needham (Buy) admits First Solar's approach to monetizing solar projects gives it more flexibility, but it also thinks "a yieldco would ultimately create more shareholder value." It's still a fan of the company's execution, and also likes its plans to increase module manufacturing capacity by up to 46% next year.
- SunPower (SPWR -1.7%), which will share details about its asset monetization plans at its Nov. 13 analyst day, is also lower.
Nov. 6, 2014, 4:39 PM
- First Solar (NASDAQ:FSLR) is lowering its 2014 revenue guidance by $100M to $3.6B-$3.9B; consensus is at $3.77B. However, gross margin guidance has been hiked to 19%-20% from 18%-19%.
- The company is reiterating guidance for full-year EPS of $2.40-$2.80 (consensus is at $2.61), op. cash flow of $300M-$500M, and module production of 1.8GW-1.9GW. Capex guidance has been cut by $50M to $250M-$300M.
- Q3 new bookings totaled 521MW, raising the YTD total to 1.7GW. YTD book-to-bill is "well above" 1.
- 448.9MW of solar modules were produced, flat Q/Q and up 5% Y/Y. Average conversion efficiency rose 20 bps Q/Q and 90 bps Y/Y to 14.2%.
- Potential bookings opportunities (mostly early-stage) rose by 1GW Q/Q to 13.7 GW. Expected future systems/3rd-party module revenue fell $200M to $7.4B. Expected module shipments for systems and 3rd-party modules rose 100 MW to 3.3GW.
- Due to project timings, free cash flow was -$390.5M. First Solar's cash/marketable securities fell by $234M Q/Q to $1.1B. Debt totaled $218M at quarter's end.
- FSLR -1.6% AH. Q3 results, PR, slides, datasheet.
Nov. 6, 2014, 4:11 PM
Nov. 5, 2014, 5:35 PM
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Aug. 5, 2014, 4:41 PM
- In spite of its big Q2 miss, First Solar (NASDAQ:FSLR) is reiterating guidance for full-year EPS of $2.40-$2.80 (consensus is at $2.70) and operating cash flow of $300M-$500M.
- The Q2 miss is blamed on project delays that led to deferred revenue recognition to 2H14, and the push-out of revenue recognition for the Campo Verde project.
- Thanks to the shortfall, gross margin dropped to 17% from 27% a year ago. Opex fell 10% to $90.8M. Net cash was $1.2B at quarter's end.
- Expected future systems/3rd-party module revenue is up $500M Q/Q to $7.6B, and expected module shipments for systems and 3rd-party modules is up by 400MW to 3.2GW.
- Potential bookings opportunities are up 500MW to 12.7GW; the lion's share are called "early-stage," and nearly half are in North America. Operations & maintenance (O&M) bookings are above 800MW YTD, thanks in part to the Skytron acquisition.
- Module production +1% Q/Q and +15% Y/Y to 447MW, and average conversion efficiency rose 50 bps Q/Q and 100 bps Y/Y to 14%. First Solar has achieved a 21% cell efficiency in lab tests, beating a prior mark of 20.4%.
- FSLR -5.3% AH. Q2 results, PR, slides
Aug. 5, 2014, 4:07 PM
Aug. 4, 2014, 5:35 PM
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Aug. 1, 2014, 12:26 PM
- Solar stocks are underperforming (TAN -4%) amid a market selloff after SunPower (SPWR -8.5%) posted mixed Q2 results and provided Q3/2014 guidance ranges with midpoints below consensus.
- SunPower also announced it's building a new plant (Fab 5) that could go live in 2017 and eventually produce 700MW+/year of modules, boosting its capacity by over 50%. "Our share has been in single digits for a while and demand for the last 24 months suggests that we can expand share," says CEO Tom Werner.
- The announcement comes 6 weeks after SolarCity (SCTY -3.5%) unveiled plans to build a 1GW+ module plant with newly-acquired Silevo's help, and said it will later build "one or more significantly larger plants at an order of magnitude greater annual production capacity."
- Minimal capacity investments, together with rising U.S./Asian demand, have helped module prices stabilize following gut-wrenching declines in prior years.
- Also: SunPower stated on its CC (transcript) it hasn't decided whether to create a solar project YieldCo similar to SunEdison's (SUNE -4.3%) TerraForm Power (TERP -4.7%), which recently turned in a strong IPO. "It does not look like the company is likely to make a decision anytime soon," says Raymond James.
- Nonetheless, Brean has upgraded SunPower to Buy, citing optimism about strong demand and healthy pricing.
- Other notable decliners: FSLR -3.6%. TSL -8.4%. JKS -6%. CSIQ -5.6%. CSUN -5.7%. YGE -5%. SOL -4.5%. ENPH -5.8%. RGSE -4.5%. HSOL -3.9%. JASO -4.4%.
May. 7, 2014, 11:45 AM
- A Q1 beat and full-year guidance hike aren't enough to keep First Solar (FSLR -4.2%) from selling off. Possibly contributing: In spite of the guidance hike, First Solar stated on its CC (transcript) Q2 EPS "will be significantly lower" than a $0.60 consensus due to project timings; that implies 2014 results will be very back-end loaded.
- Also: First Solar disclosed in its earnings slides (.pdf) its expected future systems/3rd-party module revenue is down $400M from the end of 2013 to $7.1B. However, expected module shipments are up by 100MW to 2.8GW, and potential booking opportunities have risen by 1.6GW to 12.2GW.
- Module production totaled 441MW, -1% Q/Q and +19% Y/Y. Conversion efficiency rose 10 bps Q/Q and 60 bps Y/Y to 13.5%, with lead-line efficiency rising 30 bps Q/Q and 120 bps Y/Y to 14.2%. The company is aiming for 18.1%-18.9% lead-line efficiency by 2017.
- Other solar stocks are also off (TAN -2.8%), as investors continue showing a take-no-prisoners attitude towards momentum stocks in general. Canadian Solar (CSIQ +0.3%) has given back the premarket gains it saw following a Q1 guidance hike.
- Notable decliners: SCTY -8.8%. SUNE -7%. TSL -5.5%. CSUN -5.1%. YGE -4.8%. SPWR -4.2%. DQ -5.7%.
May. 6, 2014, 4:17 PM
- First Solar (FSLR) has hiked its 2014 EPS guidance range by $0.20 to $2.40-$2.80; the consensus is at $2.49. Gross margin is now expected to be in a range of 17%-18% vs. a prior 16%-18%, and operating cash flow in a range of $300M-$500M vs. a prior $250M-$400M.
- Gross margin rose 250 bps Y/Y in Q1 to 24.9%, contributing to First Solar's big EPS beat. A 10% drop in opex to $97.4M (compares with 26% rev. growth) also helped.
- Due to project construction work, First Solar ended Q1 with $1.4B in cash/marketable securities, down $385M from the end of Q4.
- Shares +4.5% AH.
- Q1 results, PR
May. 6, 2014, 4:08 PM
May. 5, 2014, 5:35 PM
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Mar. 19, 2014, 10:25 AM
- First Solar (FSLR +11.5%) guides at its 2014 analyst meeting (webcast) for 2014 revenue of $3.7B-$4B and EPS of $2.20-$2.60 vs. a consensus of $3.77B and $3.21.
- 2015 guidance is for revenue of $3.8B-$4.3B and EPS of $4.50-$6.00 vs. a consensus of $4.24B and $3.68. 2016 guidance (accounts for the winding down of some major utility-scale U.S. projects) is for revenue of $3.8B-$4.5B and EPS of $3.50-$5.00.
- After totaling $856M in 2013, operating cash flow is expected to amount to $250M-$450M in 2014, $300M-$600M in 2015, and $800M-$1.3B in 2016.
- Whereas most of First Solar's expected 2014 revenue will come from its existing contracted pipeline, most of its expected 2016 revenue won't. The company hadn't provided 2014 guidance with its soft Q4 report.
Feb. 26, 2014, 12:14 PM
- 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%.
Feb. 25, 2014, 4:21 PM
- In addition to missing Q4 estimates, First Solar (FSLR) is guiding for Q1 revenue of $800M-$900M and EPS of $0.50-$0.60, largely below a consensus of $898.3M and $0.84.
- 443.7MW of solar modules were produced, +4% Q/Q and -13% Y/Y. Conversion efficiency +10 bps Q/Q and +50 bps Y/Y to 13.4%, cost/watt fell by $0.03 Q/Q and $0.12 Y/Y to $0.56.
- Gross margin -420 bps Q/Q and -270 bps Y/Y to 24.6%. SG&A spend +4% Y/Y to $65.7M, R&D +22% to $38.4M. Free cash flow was $137M, down from $284M in Q3 and $253M a year ago.
- Expected future module shipments were at 2.7GW at the end of Q4, flat Q/Q and up 100MW Y/Y. Expected future systems/module revenue was at $7.5B, down $300M Q/Q and $500M Y/Y. But potential opportunities rose to 10.6GW from 7.7GW.
- CC at 4:30PM ET. Q4 results, PR, datasheet, slides.
Feb. 25, 2014, 4:07 PM| 2 Comments
FSLR vs. ETF Alternatives
First Solar Inc designs, manufactures and sells solar electric power modules using a proprietary thin film semiconductor technology. Its business includes project development, engineering, procurement & construction, operating and maintenance services.
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