First Solar drops 16% on missed revenue and muted outlook

First Solar Shares (NASDAQ: FSLR) were down more than 16% in the March 3 premarket, after the U.S. maker of solar power systems and solar modules reported mixed fourth-quarter results.

Although profits beat estimates, revenues fell short of expectations as the photovoltaic (PV) manufacturing industry continued to grapple with supply chain, logistics, costs, and than to other pandemic-related challenges.

Investors were further disappointed by the muted outlook for fiscal 2022 issued by management, which was well below street expectations.

Fourth quarter figures

Positively, adjusted earnings of $1.23 per share nearly tripled year over year and beat analysts’ expectations of $1.06 per share. The company reported earnings of $0.42 per share for the prior year period.

However, revenue jumped 55.5% year-over-year to $900 million, but was lower than consensus estimate of $917.69 million.

The company also said it was in advanced stages of talks to sell its project development and O&M platform in Japan. Further details of the potential transaction were not disclosed.

Outlook for fiscal year 2022

Looking ahead, management provided financial guidance for fiscal year 2022.

The company now expects adjusted earnings of between $0 and $0.60 per share, well below the consensus estimate of $1.92 per share.

Additionally, net sales are expected to be between $2.4 billion and $2.6 billion, which is lower than the consensus estimate of $2.76 billion.

CEO Comments

First Solar CEO Mark Widmar said, “We will continue to weather the near-term headwinds with a focus on the future as we invest in realizing the full value of our differentiated thin-film technology. »,

He further added, “This pivotal year will be built around significant and continued investment in R&D, new products, manufacturing expansion and the use of new outsourcing strategies, which we believe , set the stage for sustained growth in 2023 and beyond.”

Analyst recommendation

The consensus among analysts is a block based on 1 buy, 10 blocks and 2 sells. At the time of writing, the The average First Solar stock price projection of $90.60 implies upside potential of 19.8% from current levels.

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