First Solar (FSLR) is expected to announce its 2Q16 earnings results on August 4, 2016, after market hours.
In this series, we’ll look at analysts’ expectations for First Solar’s 2Q16 earnings. We’ll also discuss the factors that led analysts to arrive at these expectations. We’ll also look at the company’s 2016 guidance and key indicators that investors should watch for in its upcoming earnings.
First Solar’s stock performance
From its 1Q16 earnings release on April 27, 2016, to July 15, 2016, First Solar’s stock price fell by nearly 16%. The stock prices of other major solar companies such as Canadian Solar (CSIQ), SunPower (SPWR), and Trina Solar (TSL) followed a similar trend during the same period. Trina Solar stock fell by nearly 23% through July 15, 2016, after First Solar’s 1Q16 results. Canadian Solar and SunPower fell by nearly 22% and 27%, respectively.
SunEdison (SUNEQ) fell the most among First Solar’s peers. Company-specific factors caused SunEdison’s stock price to fall by nearly 45% in the same period. On April 21, 2016, SunEdison filed for Chapter 11 bankruptcy protection.
The Guggenheim Solar ETF (TAN) tracks the broad-based solar market. It fell by nearly 12% during the same period.
Developments after 1Q16
On June 10, 2016, First Solar announced that the Neoen and First Solar consortium secured a 47.5 megawatt AC output capacity utility-scale solar power project in Zambia. Under this project, First Solar will provide about 450,000 high-performance solar modules. According to the company’s press release, the project is scheduled to be completed by mid-2017.
On July 5, 2016, First Solar announced the shifting of its Malaysian production capacity to the company’s recently announced Series 5 thin-film photovoltaic module offering. As a result, the company will end production of its crystalline silicon solar panel product currently manufactured at this site.
FSLR also expects to incur a non-cash impairment charge of about $90 million–$110 million. However, the proposed decision is expected to reduce the company’s operating expenses by $2 million–$4 million in 2016 and $8 million–$10 million annually going forward. As per the company’s press release, the proposed assembly line is anticipated to be operational by early 2017.
Next, let’s see how analysts rate First Solar.