First Solar, Inc. (NASDAQ:FSLR) announced financial results for the second quarter of 2015. Net sales were$896 million in the quarter, an increase of $427 million from the first quarter of 2015. The increase in net sales from the prior quarter resulted from increased revenue recognition on the Silver State South project and the sale of majority interests in the North Star and Lost Hills-Blackwell projects.
The Company reported second quarter GAAP earnings per fully diluted share of $0.93, compared to a loss of ($0.62) in the prior quarter. The sequential increase in net income was due to higher systems project revenue, project cost improvements and a discrete tax benefit in the second quarter of approximately $42 million.
Cash and marketable securities at the end of the second quarter were approximately $1.8 billion, an increase of approximately $291 million compared to the prior quarter. The increase in cash and marketable securities during the quarter was due to receipts from the sale of majority interests in the North Star and Lost Hills-Blackwell projects as well as proceeds received in conjunction with the 8point3 Energy Partners IPO.
“We achieved significant financial and technological milestones this past quarter with the IPO of 8point3 Energy Partners and a new record module conversion efficiency of 18.6%,” said Jim Hughes, CEO of First Solar. “In combination with year-to-date bookings of 1.4GW and full year earnings guidance of over three dollars per share, we continue to execute across all elements of our business.”
The Company is providing guidance for 2015 as follows:
|Net Sales||$3.5B to $3.6B|
|Gross Margin %||21% to 22%|
|Operating Expenses||$415M to $425M|
|Operating Income||$330M to $370M|
|Effective Tax Rate1||2% to 5%|
|Earnings per Share1, 4||$3.30 to $3.60|
|Net Cash Balance2||$1.2B to $1.4B|
|Capital Expenditures||$175M to $200M|
|Working Capital3||$1.1B to $1.3B|
|Shipments||2.8GW to 2.9GW|
|1-||Includes $42 million benefit from discrete tax item in Q2 2015|
|2-||Cash & Marketable securities less debt at end of 2015|
|3-||Expected increase in working capital from December 31, 2014|
|4-||Includes $0.16 of equity in earnings, primarily related to ownership interest in 8point3|
Following the earnings announcement, shares of First Solar jumped 13.46% to $49.30 in after-hours trading. FSLR has a 1-year high of $73.78 and a 1-year low of $39.18. The stock’s 50-day moving average is $46.46 and its 200-day moving average is $52.87.
On the ratings front, First Solar has been the subject of a number of recent research reports. In a report released today, J.P. Morgan analyst Paul Coster maintained a Buy rating on FSLR, with a price target of $68, which implies an upside of 55.6% from current levels. Separately, on July 14, Standpoint Research’s Ronnie Moas upgraded the stock to Buy and has a price target of $60.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Paul Coster and Ronnie Moas have a total average return of -0.2% and 7.9% respectively. Coster has a success rate of 51.0% and is ranked #2741 out of 3724 analysts, while Moas has a success rate of 71.1% and is ranked #27.
The street is mostly Neutral on FSLR stock. Out of 6 analysts who cover the stock, 3 suggest a Hold rating , 2 suggest a Buy and one recommends to Sell the stock. The 12-month average price target assigned to the stock is $51.33, which represents a potential upside of 17.5% from where the stock is currently trading.
First Solar Inc is a provider of solar energy solutions. It designs, manufactures and sells PV solar modules with a thin-film semiconductor technology. It also manufactures crystalline silicon solar modules.