First Solar, Inc. (NASDAQ:FSLR) announced financial results for the third quarter of 2016. Net sales were $688 million, a decrease of $246 million from the prior quarter, due to the completion of multiple systems projects during the quarter, partially offset by higher module-only sales.
The Company reported third quarter earnings per share of $1.49, compared to $0.13 in the prior quarter. The third quarter was impacted by pre-tax charges of $4 million, related to previously announced restructuring actions. Restructuring related charges in the second quarter were $86 million. Third quarter non-GAAP earnings per share, adjusted for restructuring charges and a foreign tax benefit, were $1.22, compared to $0.87 in the second quarter. Net income was higher versus the prior quarter as a result of lower restructuring charges and the aforementioned foreign tax benefit.
Cash and marketable securities at the end of the third quarter increased to $2.1 billion, primarily due to borrowing under the Company’s revolving credit facility. The short-term borrowing is a result of the ongoing construction of large scale projects which have not yet been sold. Cash flows used in operations were $76 million in the third quarter.
“In the third quarter our operational and financial results were solid,” said Mark Widmar, CEO of First Solar. “Our entire fleet module efficiency for the past quarter was 16.5% and our lead line efficiency exited the quarter at 16.9%, demonstrating continued execution on our technology roadmap. We are pleased with our current year financial performance; however, current market conditions are extremely challenging and require us to carefully assess our short and long-term strategic response.”
The Company updated its 2016 guidance based on third quarter results and the revised sale timing for the California Flats and Moapa projects. These projects are now expected to be sold in 2017. The updated guidance is as follows:
Shares of First Solar are up nearly 2% to $41.25 in after-hours trading. FSLR has a 1-year high of $74.29 and a 1-year low of $33.74. The stock’s 50-day moving average is $37.72 and its 200-day moving average is $45.26.
On the ratings front, FSLR has been the subject of a number of recent research reports. In a report issued on October 26, Goldman Sachs analyst Brian K. Lee maintained a Hold rating on FSLR, with a price target of $42, which represents a slight upside potential from current levels. Separately, on October 21, Deutsche Bank’s Vishal Shah reiterated a Hold rating on the stock and has a price target of $44.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Brian K. Lee and Vishal Shah have a yearly average return of 2.1% and a loss of 21.2% respectively. Lee has a success rate of 44% and is ranked #1334 out of 4173 analysts, while Shah has a success rate of 26% and is ranked #4027.
The street is mostly Neutral on FSLR stock. Out of 16 analysts who cover the stock, 10 suggest a Hold rating , 5 suggest a Buy and one recommends to Sell the stock. The 12-month average price target assigned to the stock is $55.67, which implies an upside of 36% from current levels.
First Solar, Inc. operates as a solar energy solutions company. It engages in the designing, manufacturing, marketing and distribution of photovoltaic solar power systems and solar modules with an advanced thin-film semiconductor technology. The company operates in two business segments: Components and Systems. The Components segment designs, manufactures and sells solar modules primarily to solar project developers and system integrators. The Systems segment provides a complete solar power system solution, which includes project development, engineering, procurement and construction services, operating and maintenance services. It also develops sites for building solar power systems using solar modules and provides a complete solar power system solution, which includes project development, engineering, procurement and construction services, operating and maintenance services.