First Solar Inc (NASDAQ:FSLR) reported third-quarter earnings that missed analyst expectations, with revenue coming in significantly below estimates and the company lowering its full-year guidance. Shares of the solar panel manufacturer plunged over 8%.
First Solar posted Q3 adjusted earnings per share of $2.91, missing the analyst consensus of $3.11. Revenue for the quarter came in at $887.67 million, well below the expected $1.07 billion and down from $1 billion in the previous quarter. The company attributed the revenue decline to lower module sales volumes and a $50 million product warranty reserve charge.
For the full year 2024, First Solar lowered its guidance, now expecting earnings per share between $13.00 and $13.50, compared to the previous analyst consensus of $13.44. The company also reduced its revenue forecast to a range of $4.1 billion to $4.25 billion, down from the prior consensus of $4.44 billion.
Volume sold is expected to be 14.2-14.6 GW, down from the prior forecast range of 15.6-16.3 GW.
Bank of America (NYSE:BAC) analysts reiterated a Buy rating on First Solar stock after the report, saying they view the recent challenges "as situational rather than structural."
"Although volume guidance was reduced—primarily due to three contract terminations and modules originally assumed to be sold this year —these issues appear largely idiosyncratic."
Separately, RBC (TSX:RY) Capital Markets analysts cut their price target on FSLR to $280 from $315 after the report's release but highlighted some positives. They noted the company's negotiations for the use of its TOPCon patents, which "could be upside to valuation."
Moreover, RBC's team believes First Solar could be a beneficiary of more aggressive protectionist policies should Donald trump win the upcoming election.
Despite the challenging quarter, CEO Mark Widmar expressed satisfaction with the company's progress, stating, "As we approach the end of 2024, we remain pleased with the progress made across our business, navigating against a backdrop of industry volatility and political uncertainty."
First Solar reported a decrease in its net cash balance to $0.7 billion from $1.2 billion in the previous quarter, primarily due to capital expenditures for new U.S. factories in Alabama and Louisiana.
The company's year-to-date net bookings stood at 4.0 GW, with 0.4 GW added since the second quarter earnings call. First Solar's expected sales backlog remains robust at 73.3 GW.
Senad Karaahmetovic contributed to this report.