First Solar, Inc. (NASDAQ: FSLR)

First Solar is having an incredibly rough day in the market today, and for good reason. Yesterday, after the closing bell, the company reported its Earnings for the second quarter. While both earnings per share and revenue blew away expectations, guidance caused concerns. Today, we’ll talk about what we saw from the report, how the stock reacted to the news, and what we can expect to see from FSLR moving forward.

FSLR Reports Strong Earnings With Poor Guidance

As mentioned above, First Solar is having a rough day as the result of its Q2 report. Here’s what we saw from the report…

• Earnings Per Share – In terms of earnings per share, FSLR did exceptionally well. During the second quarter, analysts expected that the company would generate earnings in the amount of $0.54 per share. However, the company actually reported second quarter earnings in the amount of $0.87 per share.
• Revenue – With the earnings report, FSLR definitely didn’t disappoint with regard to revenue either. During the second quarter, analysts expected that the company would generate revenue in the amount of $862.7 million. However, the company actually reported revenue in the amount of $934.4 million.
• Guidance – While earnings and revenue proved to be overwhelmingly positive, that wasn’t the case with regard to guidance. While the company maintained a revenue outlook for the full year at between $3.8 and $4.0 billion, EPS guidance was reduced. Previously, First Solar expected to generate earnings in the range of $4.10 and $4.50 per share through the full year. However, the company reduced this expectation to between $3.65 and $3.90 per share.

How The Stock Reacted To The News

As investors, one of the first things that we learn is that the news moves the market. Any time positive news is released with regard to a publicly traded company, we can expect to see gains in the value of the stock associated with the company. Adversely, negative news will lead to declines. While there was positive in the fact that FSLR beat earnings and revenue expectations, investors are concerned with the future growth of the company due to poor guidance. As a result, we’re seeing massive declines in the value of the stock today. Currently (3:13), the stock is trading at $43.23 per share after a loss of $6.01 per share or 12.21% thus far today.

What We Can Expect To See Moving Forward

Moving forward, I have a relatively mixed expectation of what we can expect to see from First Solar. In the short term, the stock may see further declines as a result of the disappointing guidance. However, with global economic conditions on the downtrend, I’m not surprised that earnings will be slightly lower. Nonetheless, in the long run, I believe that FSLR is well positioned for strong growth. The company has a solid product, a solid team, and a solid plan to grow the company. All in all, I believe this one will climb in the long run.

What Do You Think?

Where do you think FSLR is headed moving forward? Join the discussion in the comments below!

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