First Solar Shares Rally on Earnings Beat | Financial Buzz

First Solar Shares Rally on Earnings Beat

First Solar Inc. (NASDAQ: FSLR) announced its financial results for the fourth quarter and full year 2015 yesterday after market close. Earnings and net sales exceed expectation, and guidance for earnings maintained. Share prices surge more than 13% this morning to $70.

FSLR Three-Month Price Chart

Financials

The leading solar company reported its earnings per share for the quarter of $1.6 with net sales of $942 million, doubling analysts’ consensus estimate earnings of $0.78 per share and beating net sales expectation of $929 million. However, compared with last quarter, net sales declined 26%, and 7% year-over-year. Net income for the Q4 was $164 million, 26% down year-over-year. Free cash flow was $20 million, an increase of $37 million from the prior quarter.

For the full year 2015, earnings per share were $5.37, a 37% increase from the prior year, with new record revenue of $3.6 billion.  Cash and marketable securities were $1.8 billion and net cash remained unchanged at $1.5 billion.

Business

On the Research and Development, the company achieved new record cell efficiency of 22.1% for CadTel solar technology.  Fleet average efficiency in the Q4 increased to 16.1%, first time above 16% for an entire quarter. Bookings for 2015 were 3.4 gigawatts and potential bookings opportunities in the U.S. increased significantly, now over 40% compared to 25% in the prior quarter. Internationally, India, Latin America and Middle East show the largest potential.

In the Q4, the company produced 761 megawatts DC, an increase of 16% from previous quarter, benefited from “higher module efficiencies, increased manufacturing capacity and less downtime for technology upgrades.” For the full year, the company produced over 2.5 gigawatts DC, an increase of 36% from 2014.

Guidance 

The company maintained its 2016 guidance for ESP of $4 to $4.5 and operating income of $260 to $ 330 million. Guidance for net sales was lowered by $1 billion to $3.8 – $4 billion due to project proceeds anticipated not to be received until 2017. 

We have quite a bit of pricing power relative to the technology. We have the advantage of the First Solar bankability and strength and the quality and reliability, and the willingness to stand behind our product over the long run,” said Mark R. Widmar, CFO and director of the company.