The solar jitters are evident today after First Solar
News from First Solar was mixed, but here are the highlights I took from the release.
- Net income for the quarter was higher than expected at $116.0 million or $1.33 per share. Analysts had expected earnings per share to be $1.16.
- First Solar reiterated full year earnings guidance of $9.25 to $9.75 per share.
- Conversion efficiency increased to 11.7%.
- The company has the flexibility to move 150 megawatts of modules into project developments if sales are soft throughout the year.
- Cost per watt didn't decline from last quarter -- but did stay constant at $0.75.
- Gross margin fell 2.9% to 45.8% from last quarter, hurt by falling average sales price.
- Visibility seems to be getting shorter in Italy and Germany.
The market appears to be reacting to uncertainty again -- but First Solar provides some of the most stable earnings in the industry.
One of the challenges with analyzing manufacturers like First Solar and SunPower
Many competitors don't have the same visibility and we already saw LDK Solar
Foolish bottom line
Decreasing sales prices aren't a surprise in solar, and this has already been priced into shares. But solar manufacturers are in a situation where falling costs are struggling to keep up with falling feed-in tariffs in Europe. Furthermore, new markets like the United States and India are yet to be a significant portion of the market. It will be a turbulent year as the industry eases its reliance on Germany and Italy.
Fool contributor Travis Hoium owns shares of First Solar and SunPower. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.
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