First Solar, Inc.: Why the Sun Is Setting on FSLR Stock

first solar stockWhat’s Happening To First Solar Stock? 

First Solar, Inc. (NASDAQ:FSLR) stock dropped by 18.5% following the company’s announcement of a 30% price slash of its solar panels.

The largest solar panel producer in the United States claimed that the price drop resulted from a dip in Chinese interest in the panels, and from the resultant global oversupply. The price drop has also made discerning clients hesitant to sign off on panel contracts, thinking that the 30% price cut might just be the beginning. (Source: “First Solar plummets 18% after global surplus of panels,” CNBC, November 3, 2016.)

Alexander Bradley, First Solar’s CFO, who assumed the position on a permanent basis this October following his appointment as interim CFO in July, spoke on a conference call about the difficulties that FSLR stock faces.

First Solar plans to account for this lack of global demand by creating a cheaper and more competitive model. The company will provide more details concerning its 2017 outlook on November 16.

The company has also revised the sale timing for its California Flats and Moapa projects, which will now likely be sold in 2017.

Despite all this doom and gloom, FSLR stock still had a strong Q3 report. It beat analysts’ profit estimates for the sixth straight quarter. First Solar stock also reported 2016 gross margins between 25.5% and 26%, surpassing the previous range of 18.5% to 19%, which marks the fourth time it has done so.

Another plus is that FSLR stock earned $1.22 per share, beating out the $0.74 per share estimate.

Back to the bad news. First Solar lowered its net sales forecast to $2.8 billion-$2.9 billion, down from $3.8 billion-$4.0 billion. The net sales also took a 45.9% tumble, landing at $688.0 million, missing the analysts’ average estimate of $988.6 million.

Overall, First Solar stock is down more than 49% year-to-date. (Source: “Here’s Why First Solar Just Slashed Its Revenue Outlook,” Fortune, November 2, 2016.)

While the sun might not have set forever on First Solar, FSLR stock has been laid out in the dark for the third quarter. With an update coming on November 16 and the newer models meant to account for this demand deficiency, we’ll keep you posted with all you need to know about First Solar stock.