First Solar, Inc. (FSLR 0.41%) continues to exceed investors' expectations in 2017, and it may have an even brighter future than investors expected. Shares rose as much as 23.1% in trading Friday after the company reported third-quarter 2017 results. At 1:15 p.m. EDT, shares were still trading 18.7% higher on the day.
Revenue jumped 59.6% to $1.09 billion on the back of the sale of the California Flats and Cuyama projects. Net income was up 36.7% versus a year ago to $205.7 million, or $1.95 per share, easily surpassing the $0.83 analysts were expecting. Management also said First Solar booked 4.5 GW of future sales in the quarter and has added 6.7 GW to the backlog, or nearly two years of production, in 2017.
Full-year non-GAAP earnings guidance was also increased from $2.00-$2.50 per share to $2.40-$2.60, easily topping the $2.21 expected by analysts.
It's worth noting that project sales pulled revenue and earnings from the fourth quarter into the third quarter, which drove the massive earnings beat, and guidance implies a loss of about $0.35 per share in the fourth quarter.
First Solar is benefiting from the uncertainty created by the Section 201 trade case currently before the International Trade Commission, which could add tariffs to solar cell and panel imports. This would raise the cost of competing silicon-based solar panels but doesn't (currently) include First Solar's thin-film panels. Developers building projects don't want to take the risk that they'll have to pay inflated tariff prices in the future, so they're booking panels from First Solar now to lock in pricing. That's been a huge windfall for the company so far in 2017 and could continue to drive the stock for years to come if President Trump puts high tariffs on solar imports, something that seems fairly likely given his trade rhetoric.