It's been a wild 2018 for First Solar (NASDAQ:FSLR) and its stock. Shares nearly doubled early only to fall to about flat for the year, where they're trading today. Enthusiasm over rising bookings and earnings early in 2018 has been overshadowed by falling global solar panel prices and weakening demand in China

When First Solar reports earnings after the market closes on Thursday, Oct. 25, investors will get a better idea of how the company is faring. Here's a look at what you should be watching for in the earnings release. 

Utility-scale solar farm in the desert.

Image source: First Solar.

Bookings, bookings, bookings

Bookings will be the most important figure for investors to watch. From the start of 2018 to April 26, when first-quarter results were released, management booked 3,300 megawatts (MW) of future sales. In the following three months, only 800 MW were booked

The decline was in large part because of falling demand in China and dropping commodity solar panel prices, which may fall by one-third this year. Pricing is a major concern when demand slows down, and bookings will tell us how First Solar is standing up against lower-priced competition. 

Efficiency is becoming king

When First Solar upgraded manufacturing to Series 6, it did so primarily to lower the cost of solar panels and stay competitive in the price-sensitive utility-scale solar business. Improving the efficiency of solar panels wasn't the main goal, even though management expected some improvements, but efficiency may now be important for First Solar. What's being produced now are Series 6 modules that are rated between 17% and 18% efficient at turning the sun's rays into electricity. 

As First Solar upgraded to Series 6, global manufacturers have been upgrading to a technology known as mono-PERC, which can make solar panels that are over 20% efficient and stand up better against harsh conditions than their commodity predecessors. 

When the company's earnings plunged in 2012, it was because it started falling behind on efficiency, which left it competing mainly on price. That's not a position First Solar wants to be in again. So keep an eye out for management to comment on how First Solar compares to its competition from an efficiency standpoint.

Project development may be a struggle

The final piece of the puzzle is project development. Most of First Solar's profits over the past year were from its project development business, but development profits can be volatile. Management should let us know if margins are trending higher or lower, which will impact 2,700 MW of projects that have already been booked. 

What may impact values is rising interest rates and lower overall demand for solar developments in the U.S. Margins were high in 2017, but buyers may not be willing to pay a premium for First Solar developments going forward. And given the large pipeline, that could be a concern for long-term profitability. Or, First Solar could tell investors that margins are coming in stronger than a year ago, which would be a big boost to the bottom line. 

Lowered expectations

Investors shouldn't have high expectations for First Solar next week given the pressure solar manufacturers and developers are under. Falling solar panel prices and weak global volume will likely mean shrinking profits for First Solar as well. Any surprise to the upside would be welcome news, but investors should keep low expectations heading into the report.

Travis Hoium owns shares of First Solar. The Motley Fool recommends First Solar. The Motley Fool has a disclosure policy.