First Solar disappointed analysts yesterday when it missed pretty badly with its Q2 revenue and then guided down 2013 revenue by a couple hundred million. 2013 had been off to a stelar start with the company’s stock price up 50 percent and with a big analyst day in April in which the company was very rosy on a stabilizing solar market, its acquisition of TetraSun and improvements in foreign demand.
Revenue will always be choppy at a company like First Solar where major deals create revenue that can take a long time to be recognized and which comes in all at once. Still the forward guidance cut is a concern and somewhat at odds with the overall sentiment among many analysts that solar panel pricing will further stabilize and that more and more markets are opening up.
The one bit of good news during the investor call related to GE getting out of the thin film solar business and handing over its unit to First Solar in exchange for 1.75 million shares. The decreased competition is part of the benefit but the bigger one has to do with GE partnering with First Solar to sell its panels under the GE brand. A lot will depend on which direction GE’s big power plant customers go but we could see more co generation plants that pair a fossil fuel source with a solar source, which would be the kind of set up that GE would excel at delivering due to its engineering expertise. If that business grows, First Solar would benefit.