First Solar, Inc. Earnings Cheat Sheet: Profit Up

S&P 500 (NYSE:SPY) component First Solar, Inc. (NASDAQ:FSLR) reported higher profit for the third quarter as revenue showed growth. 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 First Solar, Inc. rose to $196.5 million ($2.25 per share) vs. $176.9 million ($2.04 per share) in the same quarter a year earlier. This marks a rise of 11.1% from the year earlier quarter.

Revenue: Rose 26.1% to $1.01 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: FSLR fell short of the mean analyst estimate of $2.67 per share. Analysts were expecting revenue of $1.01 billion.

Quoting Management: “First Solar’s performance in the quarter reflects our superior technology, strong execution capability, and integrated business model – all of which have enabled us to weather a difficult market environment relatively well,” said Mike Ahearn, Chairman of the Board and Interim Chief Executive Officer of First Solar. “Going forward, our goal is not just to survive the current environment, but to transcend it by creating and expanding markets worldwide that do not depend on today’s subsidy programs. This requires that we re-focus our strategy and commit our resources to solving the pressing energy needs that exist in much of the world.”

Key Stats:

Gross margin shrank 2.6 percentage points to 37.7%. The contraction appeared to be driven by increased costs, which rose 31.6% from the year earlier quarter while revenue rose 26.1%.

A year-over-year revenue increase last quarter snaps a streak of three consecutive quarters of revenue declines. Revenue fell 9.4% in the second quarter, 0.1% in the first quarter and 4.9% in the fourth quarter of the last fiscal year.

Last quarter’s profit increase breaks a streak of two consecutive quarters of year-over-year profit decreases. In the second quarter, net income fell 61.6% while the figure dropped in the first quarter.

The company has now fallen short of estimates in the last two quarters. In the second quarter, it missed expectations by 23 cents with net income of 70 cents versus a mean estimate of net income of 93 cents per share.

Looking Forward: For the next quarter, analysts are growing pessimistic about the company’s expected results. The average estimate for the fourth quarter is $4.18 per share, dropping from $4.28 a month ago. For the fiscal year, the average estimate has moved down from $9.29 a share to $8.88 over the last ninety days.

Competitors to Watch: SunPower Corporation (NASDAQ:SPWRA), Suntech Power Hldgs. Co., Ltd. (NYSE:STP), Trina Solar Limited (NYSE:TSL), General Electric Company (NYSE:GE), Yingli Green Energy Hold. Co. Ltd. (NYSE:YGE), MEMC Electronic Materials, Inc. (NYSE:WFR), Evergreen Solar, Inc. (NASDAQ:ESLR), Energy Conversion Devices, Inc. (NASDAQ:ENER), DayStar Technologies Inc. (NASDAQ:DSTI), and Ascent Solar Tech., Inc. (NASDAQ:ASTI).

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(Source: Xignite Financials)