What happened

Shares of First Solar (NASDAQ:FSLR) rose 31.5% in October, according to data from S&P Global Market Intelligence. The U.S. solar panel manufacturer held its third quarter earnings report late in the month, blowing past analyst estimates, all while polling showed a solar-friendly Democratic Administration was likely to win in the November elections.

Solar panels under a starry night sky.

Image source: Getty Images.

So what

In the third quarter, First Solar blew past analyst expectations, growing revenue 69.7% over last year, with EPS of $1.43 more than doubling analyst expectations of $0.62. CEO Mark Widmar said, "The dedication we continue to witness from our associates enabled us to expand module segment gross margin, close the sales of our Ishikawa, Miyagi, and Anamizu projects in Japan, and increase earnings per share quarter-over-quarter. This result reflects the strengths of our competitively advantaged CdTe modules and vertically integrated manufacturing process."

Other outside events also boosted the entire solar sector in October. For one, the International Energy Agency released its annual report, forecasting renewable energy sources will take a "starring role" in the near future as cost declines increase adoption while COVID-19 declines in demand will be more difficult for fossil fuel operators. That report followed a September pledge by China to become carbon neutral by 2060, and preceded the expected Democratic win in the U.S. November elections, which could lead to more solar-friendly policies.

Now what

Going forward, First Solar and its peers should continue to benefit, especially now that China recently boosted its renewable aspirations, and Europe is in the process of working out the Green Deal policies that will likely pass next year in some form.

If the U.S. follows in the wake of Joe Biden's win -- a big if, considering the makeup of the Senate -- it's possible all of the world's major economies will tie their post-pandemic economic recovery efforts to green stimulus investments, benefiting the solar sector overall and leading companies within it, such as First Solar.

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