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First Solar Revised 2017E Guidance

|Includes: First Solar, Inc. (FSLR)

FSLR just released guidance for 2017. Module prices are collapsing so they are making some strategic moves here to transition to Series 6 production. This is requiring all sorts of impairement charges (mostly non-cash) but it also means the company is projecting draw down cash balances.

The new guidance is significantly below guidance of $3b in revenues and $407MM in EBITDA. Gross Margins around 12.5%-14.5%. Consensus had FSLR making some $1.8 EPS.

Here are the revised numbers. Revenues of $2.5-2.6b. Gross Margins are at 12.5%-14.5%. Operating expenses are down to $290-305MM. EPS is down to $0-0.5 per share. Shipments coming down to 2.4GW to 2.6GW. All these numbers are down sharply from 2016.

The stock is going to get BUTCHERED tomorrow. It is already down 10% after hours, but that seems mild vs. how much below 2017 guidance is.

The solar industry is going through a downturn and with a Trump presidency, its not clear how or when it will recover.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.