What happened 

Shares of solar manufacturer First Solar Inc. (NASDAQ:FSLR) jumped 30.3% in May, according to data provided by S&P Global Market Intelligence, after the company reported a solid first quarter.

So what 

On May 2, First Solar reported Q1 results that showed revenue of $892 million and earnings of $0.09 per share. Better yet, management increased its margin guidance by 150 basis points to a range of 12.5% to 14.5%, and said GAAP earnings per share would be between a loss of $0.30 and a profit of $0.40 per share. And net cash level will be $1.5 billion to $1.7 billion, $100 million more than management previously expected. 

First Solar utility scale solar installation in an open field.

Image source: First Solar.

Financial performance is going to be better than expected because projects First Solar is selling are commanding higher prices than it originally forecast. But the focus of the conference call was on the company's upgrade from Series 4 modules to Series 6, which is going as well as can be expected; customers are eager for the new product. 

Now what 

Trading in solar stocks early in 2017 is really about improving expectations from a very low bar. This was expected to be a bad year for solar companies because of a forecast decline in demand in both the U.S. and China, but as the year goes on, investors are getting a little less worried about results. Companies that make it through the year in solid shape should be able to take advantage of growing solar demand globally and an expected increase in installations as early as next year. Now that we're nearly halfway through the year, some of the concern about 2017 is fading, and the increase in guidance shows that First Solar will likely come out of the year in much better shape than many of its competitors. 

Travis Hoium owns shares of First Solar. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.