First Solar, Inc. Smashes EPS Estimates, Stock Dives On Sale Miss

First Solar released its latest earnings report after closing bell tonight, posting adjusted earnings of $1.66 per share on $848 million in revenue. Analysts had been expecting earnings of 94 cents per share and $959 million in revenue. In last year’s first quarter, the solar company posted losses of 62 cents per share and $469.2 million in revenue, but each of the three quarters since then have been in the green. In the fourth quarter, First Solar posted earnings of $1.66 per share.

First Solar blames timing

Basic earnings were $1.67 per share, compared to last year’s losses of 61 cents per share. First Solar management blamed the $94 million sequential decline in net sales on “the timing of systems revenue recognition across multiple projects, partially offset by higher revenue from the Desert Stateline project.” They also said module plus offering net sales declined quarter over quarter. The increase in revenue from the Desert Stateline project was due to an amendment to the original sales agreement with Southern Company. Management defined the results as a “very strong start” to the year.

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“The sale of additional economic interests in our Stateline project further strengthens our relationship with a strategic business partner, and the transaction provides greater flexibility for future dropdowns to 8point3,” said First Solar CEO Jim Hughes in a statement. “We continue to operate our business with a disciplined approach and are focused on achieving our 2016 objectives communicated at our recent Analyst Day.”

The company added $1.9 billion to its cash and marketable securities during the quarter and reported $50 million in cash flows from operations.

Expectations for First Solar had surged since the fourth quarter earnings report, according to Estimize, which pegged the EPS estimate increase at 63% just before tonight’s print. The firm said revenue estimates climbed 5% between the fourth quarter release and tonight’s report, so tonight’s disappointment comes as quite a shock to the market.

First Solar updates guidance

First Solar management said they expect full-year earnings of $4.10 to $4.50 per share, against the consensus of $4.30 per share. That’s an increase to the low end of their previously provided range, which was $4. They expect sales to fall between $3.8 billion and $4 billion and continue to expect shipments of 2.9 to 3 gigawatts.

First Solar shares slumped by more than 5% to as low as $56 in after-hours trades.