First Solar Inc. (Nasdaq: FSLR) – Q1 FY 2011 Earnings Preview
Thursday, April 21, 2011 1:10 PM

First Solar Inc. (NASDAQ: FSLR), the world's largest manufacturer of thin-film solar power modules, is expected to report its first quarter earnings on April 25, 2011. In fiscal 2010, the company's reported EPS exceeded analysts' consensus estimates by margins ranging from 1.70 percent to 22.70 percent.

For the first quarter, analysts' EPS estimates range from a low of $0.82 to a high of $1.86 per share, compared with a consensus estimate of $1.17 per share to $2 per share in the year ago quarter. For this quarter, analysts' revenue estimates range from a low of $474.3 million to a high of $650 million, compared with a consensus estimate of $542.97 million to $567.96 million in the same quarter a year ago. For the quarter ended March, 2011, the consensus EPS forecast has been decreased from $1.18 per share estimated 7 days ago to the current estimate of $1.18 per share.

In the last 52 weeks, FSLR has been trading in the range of $100.19 to $175.45. The last trading price of the stock was $138.47 on April 20, 2011. During the first quarter FY 2011, brokerage firm Brean Murray initiated the stock with a buy rating.

For FY 2011, the company expects net sales in the range of $3.7 billion to $3.8 billion. Operating income is expected to be in the range of $910 million to $980 million, while earnings are expected in the range of $9.25 per share to $9.75 per share.

First Solar manufactures solar modules with semiconductor technology and provides photovoltaic (PV) system solutions. It operates its business in two segments: components and systems. The components segment designs, manufactures and sells solar modules to solar project developers and system integrators.

In fourth quarter FY 2010, First Solar reported revenue of $610 million, a decrease of $188 million from the third quarter of 2010, primarily due to the timing of system sales and the December implementation of 2011 pricing, partially offset by an increase in volume. Fourth quarter net income per fully diluted share was $1.80, down from $2.04 in the third quarter of 2010 and up from $1.65 in the fourth quarter of 2009. Quarter over quarter, the net income decrease was primarily driven by lower net sales and increased expenses, partially offset by higher gross margins. Revenue for full year 2010 was $2.56 billion, up 24 percent from $2.06 billion in fiscal year 2009. Fiscal 2010 net income per fully diluted share was $7.68, up from $7.53 in fiscal 2009.

The company has never paid dividends on its common stock. The company does not currently have an authorized share repurchase program.

In the semiconductor industry, First Solar competes with Suntech Power Holding Co. Ltd. (NYSE: STP). In the trailing 12 months period, STP reported EPS of $1.44 per share on revenue of $2.90 billion, with a quarterly revenue growth of 62 percent. On the other hand, FSLR reported EPS of $7.68 per share on revenues of $2.56 billion, with a negative quarterly revenue growth of (4.90) percent. In comparison to the industry, First Solar has a trailing P/E ratio of 18.03, higher than the industry's P/E of 15.18. Its P/S ratio is 4.64 compared with the industry standard P/S ratio of 1.70. The P/B ratio of the company is 3.44, while the industry's P/B ratio stands at 3.93. The net profit margin of First Solar is 25.57 percent, compared with the industry's average margin of 8.40 percent. The industry's average on return on equity (ROE) is 8.90 percent, which is lower than company's ROE of 21.75 percent.



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