First Solar (FSLR) Tops Q3 Earnings, Raises '17 EPS Outlook

First Solar Inc. FSLR reported third-quarter 2017 adjusted earnings of $1.95 per share, beating the Zacks Consensus Estimate of 85 cents by a whopping 129.4%. The reported number also improved 60% from the prior-year figure of $1.22.

Revenues

First Solar’s revenues of $1,087 million in the quarter surpassed the Zacks Consensus Estimate of $824 million by 31.9%. Moreover, revenues improved 60% from the year-ago figure of $681.3 million, primarily due the sale of the California Flats and Cuyama projects as well as higher third-party module sales.

Operational Highlights

Gross profit in the reported quarter was $291.8 million, up 70.7% from $170.9 million a year ago.

Total operating expenses contracted 13.1% to $84.8 million due to lower research and development, selling, general and administrative expenses and restructuring and asset impairments expenses.

Operating income during the quarter was $207 million, up 182.3% from $73.3 million in the year-ago quarter.

Financial Performance

First Solar had $2,019.1 million of cash and cash equivalents as of Sep 30, up from $1,347.2 million at the end of 2016.

Long-term debt was $330.3 million at the end of the quarter compared with $160.4 million as of Dec 31, 2016.

2017 Guidance

First Solar reiterated its revenue guidance in the range of $3.0-$3.1 billion. Meanwhile, First Solar kept its operating cash flow guidance in the band of $850-$950 million. The company also continues to expect its panel shipment to lie in between 2.6-2.7 gigawatts.

The company however raised the gross margin guidance to 18% from the earlier band of 17-18%. Furthermore, the company increased the adjusted operating income guidance in the range of $210-$230 million compared with the previous guidance of $170-$220 million.

The company has also raised its full-year earnings. Currently the company expects to generate adjusted earnings in the range of $2.40-$2.60 per share compared with the prior guidance of $2.00-$2.50.

A Peer Release

8point3 Energy Partners LP CAFD, a limited partnership formed by First Solar and SunPower Corp. SPWR, reported earnings of 27 cents per share in third-quarter fiscal 2017 (ended Aug 31), missing the Zacks Consensus Estimate of 65 cents by 58.5%. It generated revenues of $27.7 million in the reported quarter, which surpassed the Zacks Consensus Estimate of $26 million by 6.5%.

An Upcoming Peer Release

Canadian Solar, Inc. CSIQ is expected to release third-quarter 2017 results on Nov 9. The company carries a Zacks Rank #3 (Hold).

Zacks Rank

First Solar currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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