First Solar (FSLR) Stock: Gaining On Earnings… What’s Next?


First Solar, Inc. (NASDAQ: FSLR)

First Solar is having an incredible day in the market today, and for good reason. The company reported its earnings for the fourth quarter of 2015 after the closing bell yesterday, producing results that were far better than expected. Today, we’ll talk about what we saw from the earnings report, how the market reacted to the news, and what we can expect to see from FSLR moving forward. So, let’s get right to it!

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FSLR Produces Strong Earnings

As mentioned above, First Solar reported its earnings for the fourth quarter yesterday after the closing bell as expected. However, the results of the report were anything but what was expected. The company was able to come out ahead with regard to both revenue and earnings. Here’s what we saw:

  • Top-Line Revenue – In terms of top-line revenue, FSLR came in well ahead of expectations. In the quarter, analysts expected revenue to be in the amount of $929.01 million. However, the company actually produced revenue in the amount of $942 million.
  • Earnings Per Share – In terms of earnings per share, FSLR also blew away expectations. During the quarter, the company generated earnings per share in the amount of $1.60. While this came in below the earnings realized last year ($1.89), the figure came in well ahead of analyst expectations of $0.78 per share.
  • Guidance – Along with earnings, FSLR released its guidance for the full year of 2016. During the year, the company expects to generate earnings in the range between $4.00 and $4.50 per share. They also expect that revenue will come in between $3.8 and $4.0 billion.

As you can see from the data above, the earnings release was overwhelmingly positive. To cap it all off, we heard the following statement from Jim Hughes, CEO at First Solar:

We exit 2015 with record annual revenues, record new bookings and earnings per share of over five dollars. As we look back to the 2015 targets first provided to investors at our Analyst day nearly three years ago, we recognize that we have achieved the efficiency, cost per watt and earnings targets outlined at that time. We enter 2016 with tremendous technology, a strong pipeline and an ongoing commitment to achieve the long-term objectives we have communicated to our investors.”

How The Market Reacted To The News

As investors, we’ve come to realize that the news moves the market, and there are few pieces of news that have the ability to move the market quite like earnings. When a company produces better than expected earnings, we tend to see gains in the value of the stock associated with that company. That’s exactly what we’re seeing from FSLR today. Currently (10:08), FSLR is trading at $67.29 per share after a gain of $5.50 per share or 8.90% so far today.

What We Can Expect To See Moving Forward

Moving forward, I’m expecting to see overwhelmingly positive movement out of FSLR. The reality here is that the world’s views toward power are changing. With global warming being a primary issue, consumers, businesses, and even governments are starting to realize that it’s important to do everything we can to reduce greenhouse gas emissions by reducing reliance on the burning of fossil fuels. As a result, demand for solar is rising, and FSLR is likely to take a big piece of the new-found demand. With strong earnings, a strong team, a great CEO, and incredible products, it only makes sense that First Solar will continue to climb!

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What Do You Think?

Where do you think FSLR is headed and why? Let us know your opinion in the comments below!

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