Solar Stocks Beat Analyst Expectations
Solar stocks seem to be on the mend. After reporting dismal revenues and earnings forecasts for most of last year and this year, solar stocks have seen some recent respite. Three companies involved with solar reported results in the past couple of weeks. Two solar companies – First Solar, Inc. (FSLR
) and SunPower Corporation (SPWR
) – reported an improvement in revenue prospects. Furthermore, Tesla, Inc. (TSLA
) is set to release its first solar roof for homes today.
On an overall basis, the results are a mixed bag, primarily because an increase in revenues does not necessarily imply an improvement in demand for their products. The prospects for residential solar, the main driver of revenues for the industry, are still bleak for the rest of this year and for next year. Installations at utilities have picked up, but they are yet to plug the revenue shortfall from the decline in residential installations. Meanwhile, solar companies are focused on cutting costs and impairment of existing assets.
First Solar is the largest U.S.-based solar manufacturer. It reported a 2 percent increase in revenues to $892 million compared with the same period a year ago. However, that increase was primarily due to a sale of its Moapa Power project to global asset manager Capital Dynamics. First Solar’s module sales declined by $179 million. Its gross profit also declined by 22.3 percent compared with the same period a year ago. The company has forecast demand for 3 Gigawatts of solar capacity in the coming quarter and is working on the development of its Series 6 module. However, this move could handicap the company’s competitiveness until the Series 6 hits the market because it will be forced to compete while relying on the Series 4 module until then.