First Solar, Inc. Beats Q4 Earnings Estimates; Offers Weak Guidance

First Solar earnings

First Solar forecasts a net loss of 25 cents to 35 cents for the current quarter

First Solar released its fiscal fourth-quarter and full-year results on Tuesday after the market close. The Tempe, Arizona-based company’s Q4 earnings almost tripled YoY, but revenues fell short of Wall Street estimates. First Solar also issued a weak guidance for the current quarter that missed the consensus estimates.

First Solar gross margins improve to 30.6%

First Solar reported fourth-quarter net profit of $192 million or $1.89 per share, up from $65.3 million or 64 cents in the same quarter a year ago. Revenues rose 31% YoY to $1.01 billion. Analysts polled by Thomson Reuters were expecting 76 cents in EPS and $1.28 billion in revenue. The solar panel maker said its gross margins improved from 24.6% to 30.6%. The company reported 311 megawatts in bookings during the quarter.

For full-year 2014, the solar panel maker generated $396.9 million or $3.91 per share in profits on revenues of $3.39 billion. Full-year bookings stood at 2.5 megawatts. However, the company offered a weak outlook for the current quarter. First Solar expects Q1 revenues to come in the range of $550 million to $650 million with a net loss between 25 cents and 35 cents. Analysts project a profit of 80 cents on revenue of $924 million.

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First Solar looking for long-term stability

The company projects Q1 results to come in below prior quarters because it is completing some large projects and keeping them on the balance sheet instead of selling them. First Solar is in advanced talks with SunPower to bundle up such unsold assets to form a joint YieldCo and spin it off.

First Solar CFO Mark Widmar said on the conference call that keeping some of the large solar projects to include in the YieldCo may affect short-term profits. But it will provide a long-term stability to the company. YieldCos are publicly-listed companies that hold power plants, generate money through long-term contracts, and issue regular dividends to shareholders.

Earlier this month, First Solar reached an agreement with Apple to build a $848 million solar farm in California. It will produce enough electricity to power Apple’s offices and stores in the state.