First Solar Margin Pressure Trumps Earnings & Guidance (FSLR)

First Solar, Inc. (NASDAQ: FSLR) looked like a decent report, but there is a sell-the-news reaction taking place in the after-hours trading session.  The solar giant posted 16% higher earnings of $2.04 EPS versus $1.79 a year ago.  Revenues rose 66% to $797.89 million.  Thomson Reuters had estimates of $1.95 EPS and $778.76 million in revenues.

Earnings would have been $0.17 higher but the company took a $0.17 charge related to the repatriation of $300 million in profits brought in from a foreign subsidiary.

First Solar also raised its fiscal target to a range of $7.50 to $7.65 EPS from a prior range of $7.00 to $7.40 EPS; it also put revenue guidance at $2.58 to $2.61 billion from a prior $2.5 to $2.6 billion.  Thomson Reuters has estimates of $7.46 EPS and $2.58 billion in revenues.

The big issue here is its gross margin, which fell to gross margin in the quarter fell to 40.3% from above 50% a year ago.

First Solar closed up 0.5% at $151.15 on the day but the shares are trading down almost 6.5% at $141.40 in the after-hours session.

JON C. OGG