Wed, Feb. 25, 9:34 AM
- BofA/Merrill and Northland Securities have upgraded First Solar (NASDAQ:FSLR) to neutral ratings after the company provided mixed Q4 results and light Q1 guidance in the wake of its YieldCo announcement. Needham and RBC have hiked their targets.
- Northland's Colin Rusch: "With FSLR’s announcement of its intention to list a yield co, we are moving to the sidelines for now until further details are available on the yield co." His $51 target (upped from $46) assumes the YieldCo will be worth $6B, sport a 3.5% dividend yield, and have cash available for distribution (CAFD) of $0.08/watt, with First Solar deploying 3GW into it by the end of 2017.
- Needham's Edwin Mok (target hiked by $5 to $75): "With the announced negotiations between FSLR and SPWR to form a joint yieldco, we are not surprised by the lowered 1Q15 guidance ... we believe management is executing its prior plans on project pipeline development, increasing efficiency and capacity expansions. The yieldco strategy coupled with FSLR's strong market position and a well capitalized balance sheet should enable FSLR to extract significant value from the joint yieldco."
- Prior First Solar coverage
Tue, Feb. 24, 5:57 PM
- Along with mixed Q4 results, First Solar (NASDAQ:FSLR) has guided for Q1 revenue of $550M-$650M and EPS of -$0.25 to -$0.35, below a consensus of $933M and $0.84. The company blames "the completion of the Desert Sunlight and Topaz projects and the retention of projects on balance sheet in relation to the announced plan to pursue a joint YieldCo vehicle with SunPower."
- 509MW of solar modules were produced in Q4, +13% Q/Q and +15% Y/Y. Conversion efficiency (fleet average) rose to 14.4% from 14.2% and 13.4%, and capacity utilization to 84% from 77% and 83%.
- Potential project bookings opportunities are down by 200MW Q/Q to 13.5GW, and expected future systems/3rd-party module revenue up by $100M to $7.5B. However, expected module shipments are up by a healthy 700MW to 4GW.
- Gross margin rose 930 bps Q/Q and 600 bps Y/Y to 30.6%. R&D spend fell 9% Y/Y to $35M, and SG&A 8% to $71M. First Solar ended 2014 with $1.99B in cash/investments, and just $217M in long-term debt.
- Shares are down just fractionally AH, as investors keep focusing on the YieldCo. They rose 10.2% in regular trading.
- Q4 results, PR, earnings slides (.pdf)
- YieldCo coverage: I, II
Tue, Feb. 24, 4:07 PM
Tue, Feb. 24, 1:16 PM
- SunPower (NASDAQ:SPWR) states in its Q4 earnings slides (.pdf) its planned solar project YieldCo with First Solar (NASDAQ:FSLR) will be a 50/50 JV, and promises it will lower the companies' cost of capital and improve their financing options for solar projects.
- Meanwhile, Deutsche's Vishal Shah (a long-time solar bull) has upgraded First Solar to Buy ahead of this afternoon's Q4 report, and declares the YieldCo could be "one of the best growth stories out there."
- Under "conservative assumptions," he sees SunPower and First Solar respectively having 640MW and 755MW of projects they can contribute, resulting in an equity value of $2.8B. Assuming an 85% payout ratio, Shah sees the YieldCo providing a 5% dividend yield. He adds the companies could each contribute another ~1.5GW of projects (via their pipelines) by the end of 2016.
- Raymond James' Pavel Molchanov compares the alliance to a Duke/UNC or Coke/Pepsi partnership. "By joining forces, First Solar and SunPower can create an asset base that is even larger ... With the S-1 set to be filed in 1Q, we see no reason why the IPO couldn’t take place in 2015."
- The YieldCo news is easily overshadowing SunPower's light Q1 guidance: Revenue of $410M-$460M and EPS of $0.05-$0.15 vs. a consensus of $544.7M and $0.25. Though the company says its "business fundamentals for 2015 remain strong," it's withdrawing its full-year guidance until YieldCo plans are finalized.
- SunPower recognized revenue on 293MW of solar systems in Q4, a little below guidance of 300MW-340MW. It expects to recognize 240MW-270MW in seasonally weak Q1. Q4 gross margin was 20.4%, +370 bps Q/Q and flat Y/Y. Q1 GM guidance is at 18%-20%.
Mon, Feb. 23, 5:35 PM
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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
FSLR vs. ETF Alternatives
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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