Why Did First Solar’s Stock Tumble after 1Q16 Earnings?

Did First Solar Beat Earnings Estimates in 1Q16?

Earnings announcement

First Solar (FSLR) announced its 1Q16 earnings after Market hours on April 27, 2016. The company also announced a big leadership transition. Mark R. Widmar, the company’s current chief financial officer, has been appointed CEO, effective July 1, 2016.

In this series, we’ll analyze First Solar’s 1Q16 results in detail and compare the results with analysts’ expectations. Also, we’ll take a look at management’s guidance, analysts’ expectations for 2016, and the outlook for the company.

First Solar’s stock reaction

First Solar posted mixed results in 1Q16. The company reported adjusted EPS (earnings per share) of $1.66 against analysts’ consensus EPS estimate of $0.87. First Solar’s stock price was down by nearly 8% during the trading session on April 28. The company’s lower-than-expected 1Q16 revenue, concerns regarding the top management transition during challenging market conditions, and broad-based Market cues dragged down the stock price further.

Peer performance

On April 28, 2016, First Solar’s Peers SunPower (SPWR), Canadian Solar (CSIQ), and SunEdison (SUNEQ) fell nearly 5%, 2%, and 3% respectively. Trina Solar (TSL) was flat on the day.

The Guggenheim Solar ETF (TAN), which tracks the broad-based solar market, fell nearly 2% on April 28. The SPDR S&P 500 ETF (SPY) closed nearly unchanged.

In the next part of this series, we’ll look at First Solar’s shipments in 1Q16 and its expected future shipments.

Continue to Next Part

Browse this series on Market Realist:

• Part 2 - A Closer Look at First Solar’s 1Q16 Shipments and New Bookings

• Part 3 - Why Did First Solar Miss Analysts’ 1Q16 Revenue Estimates?

• Part 4 - How Did First Solar’s Costs in 1Q16 Affect Its Gross Margin?