First Solar, Inc. Earnings Analysis And Stock Reaction

Following the reporting of strong first-quarter earnings after market close on Tuesday, the company struggled to find love in Wednesday trading. The company nearly doubled the consensus earnings per share and then beat the consensus revenue estimate by over $100 million.

Great earnings, horrible day

The company had diluted EPS of $1.10 and $950 million in revenues. Year-over-year for the quarter those numbers are up from $0.64 EPS on revenue of $755.2 million. The Reuters’ consensus estimates expected EPS of $0.56 and revenue of $837.95 million.

As if things weren’t going well enough, the company then raised its EPS guidance for the year from $2.20 to $2.60 to an improved range of $2.40 to $2.80. It also raised its operating income expectations. But the kicker also came in the reporting. First Solar, Inc. (NASDAQ:FSLR)’s revenues and profits come down to the timing of payments it received. The numbers reported on Tuesday represent a large payment made to the company in the first quarter that it won’t see in the next quarter.

And this was the crux when it opened trading on Wednesday. Despite the rosy numbers for Q1, Investors clearly traded on the fact that First Solar, Inc. (NASDAQ:FSLR) said during the earnings call that it would deliver EPS “significantly lower” than the current consensus estimate of $0.60 due to the aforementioned timing of sales.

The CEO then went on to say that “the remainder of earnings for the year largely be reflected in the second half of the year and we’ll see consensus estimates for those periods.”

First Solar wednesday’s trading

Wednesday’s trading seemed to ignore all the positives and focused on the second quarter guidance given on Tuesday.

Despite opening at $67.99 and rising to $69.29 early in the morning after closing Tuesday at $67.45, this gain was short lived. By 9:45AM EDT on Wednesday the stock’s descent had begun in earnest. It reached its low on the day of $61.42 just after 2PM EDT. Before the bell rang, the stock was able to recover a bit closing the day at $63.57 for a loss of $3.88 per share or a loss of 5.85%.

In early after hours trading, that upward trend continued. At 6:15PM EDT, the stock was up $0.48 or 0.76%.

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About the Author

Brendan Byrne
While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. To contact Brendan or give him an exclusive, please contact him at theflask@gmail.com

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