The last time First Solar (NASDAQ:FSLR) reported its quarterly results, all the numbers were strong, but the company scared solar investors straight with talk of a frightening solar freeze. The shares dropped $30, or about 22%, in response.

Following that frank report, we've seen Energy Conversion Devices (NASDAQ:ENER) stumble and SunPower (NASDAQ:SPWRA) (NASDAQ:SPWRB) slump.

All the more surprising, then, were First Solar's first-quarter numbers, which were just a picture of tranquility. First Solar certainly joins Silicon Laboratories (NASDAQ:SLAB) in the underpromise and overdeliver camp this quarter.

Revenue dipped a mere 4% sequentially, while gross and operating margins fattened. Earnings actually jumped 24% from last quarter, but that was largely attributable to a one-off tax benefit.

It all seems kind of hard to believe, at first. Though First Solar saw some better order flow in the back half of the quarter, not a heck of a lot has changed in the solar sector. Sure, project funding in Germany is looking pretty good, with money flowing to sub-megawatt rooftop systems, plus some reported signs of life in the larger project space. Beyond that, though, visibility remains very limited on the financing front.

The company also continues to consider 10% to 15% of current customer contracts to be at risk of default. That's a potential problem when you're not much of a spot market player.

Aha! This is the moment when the solar-powered light bulb lit up above my head. Much like Yingli Green Energy (NYSE:YGE), First Solar is quite heavily levered to a core European clientele, with which it maintains ongoing supply relationships. For example, 75% of sales went to these existing customers, while the rest was split between U.S. utilities and a freshly subsidized Ontario market. I think you need look no further to explain the mystery of the resilient top line.

As for margins, First Solar managed to drive down its manufacturing cost to $0.93/watt -- an 18% year-over-year improvement, and 5% better sequentially. Those Malaysian factories must truly be a marvel, because they continue to kick costs to the curb.

I don't think this is the first time we've seen other solar stocks take cues from a strong report by First Solar. I can't emphasize enough how misplaced many of those bets are. Once again, this low-cost leader is pulling away from the pack. There is no tide lifting those leakier boats that folks were buying yesterday.

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Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his CAPS profile or follow his articles using Twitter or RSS. The Motley Fool has a disclosure policy.