First Solar Earnings: Margins Shrink Again, Net Income Falls

S&P 500 (NYSE:SPY) component First Solar, Inc. (NASDAQ:FSLR) saw profit fall amid falling revenue. First Solar designs and manufactures solar electric power modules using a proprietary thin film semiconductor technology.

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First Solar Earnings Cheat Sheet for the Third Quarter

Results: Net income for the solar fell to $87.9 million ($1 per share) vs. $196.5 million ($2.25 per share) a year earlier. This is a decline of 55.3% from the year-earlier quarter.

Revenue: Fell 16.6% to $839.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: First Solar, Inc. reported adjusted net income of $1.27 per share. By that measure, the company beat the mean estimate of $1.10 per share. It beat the average revenue estimate of $688.2 million.

Quoting Management: “Despite continued uncertainties and over-supply conditions in the market, First Solar delivered another strong quarterly performance,” said Jim Hughes, CEO. “Our quarterly performance coupled with our recent project wins in sustainable markets demonstrates we are making meaningful progress in achieving our strategic plan for long-term growth and value creation.”

Key Stats:

Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell 9.3 percentage points from the year-earlier quarter to 28.4%. In that span, margins have contracted an average of 16.2 percentage points per quarter on a year-over-year basis.

The company has beaten estiamtes for two quarters in a row. In the second quarter, it topped expectations with net income of $1.52 versus a mean estimate of net income of 89 cents per share.

Revenue fell last quarter after increasing in the previous quarter. Revenue rose 79.7% to $957.3 million in the second quarter from the year earlier.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the fourth quarter is $1.77 per share, down from $1.82 ninety days ago. The average estimate for the fiscal year is now $4.47 per share, down from $4.48 sixty days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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