First Solar Share Price Slumps as Q2 Earnings Miss Estimates

First Solar Share Price Slumps as Q2 Earnings Miss Estimates
Written by:
Tsveta van Son
7th August 2013
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iNVEZZ.com, Wednesday, August 7th: First Solar Inc (NASDAQ:FSLR), the biggest US solar panel manufacturer, yesterday reported a drop in second-quarter earnings that missed analyst expectations. The company also announced a technology partnership deal with US industrial giant General Electric Co (NYSE:GE) aimed at advancing thin-film solar cells and modules. First Solar’s share price, which closed about two percent lower on Tuesday, slumped more than nine percent in after-hours trading on the NASDAQ. GE’s share price was little changed on the NYSE yesterday.

**First Solar’s Q2 Earnings Drop**
Arizona-based First Solar said in a statement that its net income per fully diluted share fell to $0.37 during the second quarter of 2013, as compared with $1.27 in the prior-year quarter and $0.66 in the first quarter of 2013. Excluding one-time items, First Solar earned $0.39 per share, below the $0.53 average forecast of analysts polled by Bloomberg.

“It was a miss, clearly,” Pavel Molchanov, an analyst at Raymond James & Associates Inc told the newswire. “They missed our estimate pretty badly. It was really a top line miss.”
First Solar’s net sales dropped to $520 million (£339.5 million) in the quarter, a decrease of $235 million (£153.4 million) from the previous quarter and a decrease of $438 million (£285.9 million) year-on-year. The company attributed the decline to lower systems business project revenues as well as to lower module-only sales volume to third parties.

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First Solar trimmed its full-year guidance, saying it expects net sales of $3.6 billion to $3.8 billion, down from $3.8 billion to $4 billion, and earnings of $3.75 to $4.25 per share, as compared with a previous forecast of $4 to $4.50 per share.

!m[US Solar Panel Maker Strikes Partnership Deal with General Electric](/uploads/story/4627/thumbs/pic-1_inline.jpg)
“Revenue recognition can be choppy for a project-centric company such as this, so the quarterly miss is not all that shocking,” Raymond James’ Molchanov said in an e-mail, as quoted by Reuters. “But the guidance cut – less than four months after giving the guidance at the April analyst day – is highly damaging to market sentiment.”

GE Partnership
First Solar yesterday said that it had acquired GE’s global cadmium telluride (CdTe) solar intellectual property portfolio, with GE receiving 1.75 million shares of First Solar common stock as part of the transaction. Connecticut-based GE has agreed to retain First Solar’s shares for at least three years.
“We are creating an exciting synergy with this deal,” First Solar’s CEO Jim Hughes said in a company statement. “The addition of GE’s PV thin film technology and R&D resources will advance our technology roadmap, while realising cost reduction in our manufacturing process.”
The two companies also formed a commercial partnership around solar inverter technology, with the collaboration expected to lead to an improvement in solar grid integration.
**First Solar’s share price closed 0.32 percent lower at $46.75 on the NASDAQ on August 6 and declined 9.07 percent to $42.51 in after-hours trading.**

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**GE’s share price closed 0.86 percent down at $24.31 on the NYSE on August 6 and rose 0.04 percent to $24.32 in after-hours trading.**

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