Why First Solar's Shares Went Dark

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of First Solar dropped 14% today after the company released fourth-quarter earnings.

So what: The report was mixed, with earnings per share of $2.04 beating the $1.75 estimate by a wide margin and revenue of $1.08 billion falling short of the $1.32 billion estimate. The problem is that first-quarter revenue guidance was $650 million to $750 million, below estimates of $822 million, and earnings-per-share guidance of $0.70 to $0.90 was on the low end of expectations.  


Now what: First Solar isn't booking enough projects to keep up with what it's building, so the entire business model is coming into question right now. Investors are watching results deteriorate and not seeing the positive future they once thought was possible. I think this quarter exposes holes in First Solar's thin-film product and highlights why the company needs to move beyond being a manufacturer and focus on the systems business.

Investors and bystanders alike have been shocked by First Solar's precipitous drop over the past 12 months, and now the stakes have never been higher for the company. Is it done for good, or ready for a rebound? If you're looking for continuing updates and guidance on the company whenever news breaks, we've created a brand-new report that details every must know side of this stock. To get started, just click here now.

The article Why First Solar's Shares Went Dark originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDrawThe Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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