What happened
Shares of solar panel manufacturer First Solar (FSLR 2.12%) fell as much as 15.1% in trading on Friday after the company announced first-quarter 2023 financial results. Shares recovered slightly as the day went on but were still down 9.7% at 3 p.m. ET.
So what
Net sales were up 49% from a year ago to $548.3 million but down 45% from Q4 2022. Net income was $42.6 million, or $0.40 per share, improving from a $0.41 per-share loss a year ago. However, analysts were expecting revenue of $724 million and earnings of $0.99 per share.
Results may not have hit expectations for the quarter, but management said the full-year guidance is unchanged. Net sales are expected to be between $3.4 billion and $3.6 billion with earnings per share (EPS) of $7.00 and $8.00. They also said that backlog now stands at 71.6 gigawatts, or enough to be sold out into 2027.
Now what
First Solar's results can be volatile quarter to quarter depending on when shipments are made and when projects are put into service. I take more from the fact that full-year guidance is unchanged than anything else.
The market's reaction seems to be pretty harsh given the current valuation. Shares trade for just 24 times the midpoint of 2023 guidance, and that doesn't include significant growth expected in the next few years. This is a short-term reaction to a long-term investment, which is a buying opportunity today.
