First Solar, Inc. (FSLR) Surge Puts Solar ETFs In Focus

solarThe solar power industry has been gaining immense popularity of late thanks to growing demand for photovoltaic cells and incredible share price appreciation. This trend will likely continue with astounding Q3 results from the U.S. solar-panel manufacturer behemoth, First Solar, Inc. (NASDAQ:FSLR).
First Solar Earnings in Focus

The solar giant reported earnings per share of $2.28, strongly outpacing the Zacks Consensus Estimate of 92 cents and growing nearly 80% from the year-ago earnings. Revenues climbed 51% year over year to $1.27 billion and surpassed our estimated $961 million.

Robust performances were credited to higher module sales to third-party customers, higher business project revenues, and higher manufacturing utilization.

The company raised its earnings per share outlook from $3.75–$4.25 to the $4.25–$4.50 range for the fiscal year. This is well ahead of the Zacks Consensus Estimate of $3.74, suggesting optimism in the company’s growth prospects.

Though FSLR is expected to beat on the bottom line, revenues growth might create a headwind for the full fiscal year. This is because the company now expects revenues in the range of $3.4–$3.6 billion, down from the previous guidance of $3.6–$3.8 billion and the Zacks Consensus Estimate of $3.632 billion.

This outlook might be little disappointing, but investors should note that lower revenues could translate into higher profits if pricing remains attractive. This is particularly true as gross margins are rising. FSLR expects gross margin to grow in the range of 24–26% from 22–23% for the full year.

Driven by upbeat results, shares of FSLR rose over 9% during the after-market trade, but closed a little lower with a nearly 7.3% gain (read: Inside the Incredible Surge in Solar ETFs).

ETF Angle

Many ETFs with heavy exposure to this solar giant are enjoying huge gains as First Solar made an impressive comeback this year. In fact, FSLR share price more than doubled in the the past year and over 63% year-to-date. This suggests that the company is growing and has room for further upside.

Below, we have highlighted two solar ETFs having larger allocation to FSLR and will be in focus in the coming weeks as well:

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