First Solar, Inc. (FSLR) released its Q4 earnings report, showcasing a strong performance that exceeded expectations. Expectations were low as higher interest rates have had a negative impact on the front-end loaded solar projects. This has weighed on the sector with shares of FSLR down 15% YTD.
The Q4 results and, more importantly, the FY24 outlook will be viewed as a pleasant surprise by market participants. The question is will it be enough to lift the stock out of its malaise? A test of the 20-sma ($148.68) represents the first hurdle for solar bulls.
The company reported earnings per share (EPS) of $3.25, surpassing the consensus of $3.14. Revenues rose by 15.5% year-over-year to $1.16 billion, compared to the $1.31 billion consensus.
First Solar's net bookings for 2023 totaled 28.3 GW, with 2.3 GW since the third quarter earnings call at a base ASP of 31.8 c/w.
Looking ahead to FY24, First Solar issued in-line guidance, with EPS projected to be in the range of $13.00 to $14.00, compared to the $13.26 consensus. The company expects revenues to be in the range of $4.4 to $4.6 billion, compared to the $4.56 billion Street expectations.
First Solar also anticipates selling between 15.6GW and 16.3GW of volume. Operating income is forecasted to be $1.5 billion to $1.6 billion, which includes production start-up expense of $85 million to $95 million, underutilization costs associated with factory ramp of $40 million to $60 million, and Section 45X tax credits of $1.0 billion to $1.05 billion. The year-end 2024 net cash balance is projected to be in the range of $0.9 billion to $1.2 billion.
First Solar's Q4 earnings report and FY24 outlook demonstrate the company's resilience and growth potential in the face of market challenges. With strong financial performance and a clear vision for the future, First Solar is well-positioned to capitalize on the growing demand for solar energy solutions.
Shares of FSLR have traded lower off the report, likely due to some disappointment with the FY24 outlook, as the company's revenue guidance is at the low end of expectations, while the EPS guidance is at the midpoint. However, the company has shown a track record of beating estimates, and the strong fundamentals and growth prospects suggest that the stock may be worth considering for investors seeking exposure to the solar energy sector.