The terrible year we expected for the solar industry in 2017 isn't turning out to be as bad as anticipated, at least not yet. There aren't a lot of data points so far, but if First Solar's (NASDAQ:FSLR) first-quarter earnings report is any indication, this might not be a bad year at all for the industry's leading companies. 

First Solar not only beat expectations for the first quarter, it also raised guidance and had a generally positive outlook on the rest of the year. Here's a look at what we learned.

First Solar utility installation with the sun in the background.

Image source: First Solar.

The numbers

In First Solar's first quarter, net sales landed at $891.8 million while gross profit came in at 9.4% and net income at $9.1 million, or $0.09 per share. Management also raised its guidance for full-year revenue by $50 million, to $2.85 billion to $2.95 billion, and gross margin by 150 basis points, to 12.5%-14.5%. Earnings per share on a GAAP basis is expected to be between $0.30 and $0.40 as well. This was a big step forward since it had previously expected a loss on the bottom line. 

The increased guidance was driven by strong demand for Series 4 modules this year, as seen in 600 MW of bookings so far this year. Management said on the conference call that project sale prices will likely be worth more than anticipated, which the new guidance reflects. 

The balance sheet also remained strong with $2.45 billion in cash and marketable securities and $2.2 billion in net cash. That leaves plenty of capital to build out the Series 6 production the company is betting its future on. 

Series 6 is moving along

Most of management's presentation was focused on the Series 6 product that's currently being built out with production expected next year. First Solar has been working with third-party customers to improve the design and let them assess the product. It is also working to verify energy production, costs, and installation design before customers will be comfortable making orders so this is a big step in the process. 

So far, management is indicating that everything is going according to plan and customers are impressed with what they see. But I wouldn't expect it to say the upgrade was disappointing customers and we won't know if there is a significant competitive advantage until financial results from Series 6 start coming in, so take this bullishness with a grain of salt. 

Solar is looking good in 2017

This year's solar industry performance will come down to sales volume and the price of projects companies are selling. On the volume front, installation estimates are on the rise and may be up around 10% from a year ago. And First Solar's increased guidance is a sign that project sales may be worth more than expected. Maybe the solar industry in 2017 isn't in as bad a shape as many investors thought. 

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