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First Solar (FSLR) Shares Soar on Guidance, TetraSun Acquisition

By: , dated April 10th, 2013

Shares of First Solar Inc. (FSLR) closed up +12.31 or +45.54 percent to $39.35 per share on Tuesday, after the company announced an optimistic guidance for its 2013 fiscal year. The stock’s precipitous rise in Tuesday’s session triggered NASDAQ circuit breakers and was halted five times during trading.

In addition to the improved earnings guidance, First Solar announced it was acquiring TetraSun, a startup manufacturer of solar photovoltaic (PV) cells. First Solar signed a definitive agreement with TetraSun management and JX Nippon Oil & Energy Corp along with other investor for the acquisition. Terms for the deal, which is expected to close in the second quarter of 2013 were not disclosed.

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Founded in 1999 as First Solar Holdings LLC, Tempe, Arizona based First Solar is a worldwide provider of photovoltaic solar power systems that employ its module and systems technology. First Solar is the world’s largest thin-film solar manufacturer and gets as much as two thirds of its overall sales from the building and selling of utility size solar power plants.

Two years ago, the company changed its business model, originally being a large manufacturer of solar panels, First Solar shifted its focus to building solar farms for utility companies. The shift was largely due to the solar panel market being flooded by cheaper solar panels made in China.

The company’s new guidance for 2013 earnings was announced at their annual analyst day meeting and included improved guidance for 2014 and 2015. First Solar is now calling for between $4.00 and $4.50 per share for full year diluted earnings on net sales of $3.8 billion – $4.0 billion.

The company says that it plans to make $350 -$400 million in capital expenditures and expects operating cash flow to come in at $800 million-$1 billion with operating income estimated at $430 -$460 million. The analyst consensus for this year expected the solar panel producer to earn $3.60 per share this year on sales of about $3.17 billion.

In addition to the improved guidance, First Solar announced the acquisition of TetraSun. The startup makes solar panels with cutting edge cell architecture capable of conversion efficiencies exceeding 21 percent. The company can produce these cells on a commercial scale at costs comparable to conventional multi-crystalline solar cells.

The acquisition will give First Solar a producer of rooftop systems and open the market for solar panels and solar farms in Japan, which is expected to become the second largest market for solar energy products this year. First Solar will then be able to compete in the residential rooftop market with SunPower Corp. (SPWR), the largest maker of silicon based panels in the United States.

Since trading under $12 per share in early June of last year, First Solar stock has had an impressive performance. With the acquisition of TetraSun, the company stands to continue improving with increasing earnings and cash flow.

While a pull back is expected in the stock after a rise of the magnitude seen on Tuesday, the prospects of First Solar and their stock price continue to look favorable.

Other News About FSLR
First Solar Competing Against Silicon Panels on Efficiency Gains
New thin-film panels increase efficiency and can compete with silicon based panels.
First Solar Buys 150-Megawatt California Solar Power Project
FSLR buys plant from Energy Power Partners.

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After Apple, China State Media Train Their Fire on Microsoft
Chinese radio criticizes Microsoft for shorter warranty on products.

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Jay Hawk Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

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