First Solar Saves The Solar Power Sector (FSLR, SPWRA, STP, LDK, CSIQ, SOLR, ESLR)

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First Solar, Inc. (NASDAQ: FSLR) has finally given its guidance from the conference call, and it looks like this and additional supply contracts will be good news for the entire solar sector and may even spill over into other alternative energy stocks.

The company announced a 525 megawatt long-term module supply pact with Sorgenia Solar for solar power plants in Italy and extended pacts with existing customers allowing for an additional $800 million spread from 2009 to 2013.

First Solar shares were floating around the break-even mark in theafter-hours session before its guidance and before its supply pactannouncement.  But now shares are up 10% at $127.50.Below is the rest of the data:

As you will see below, this is causing a major rally in almost all of the other solar power stocks:

  • SunPower Corporation (NASDAQ: SPWRA) closed up over 12% on its owntoday and shares are up another 6.7% at $40.20 in after-hours trading.
  • Suntech Power Holdings (NYSE: STP) closed up 16% on its own today, andits shares are up over 6% more at $16.40 in after-hours trading.
  • LDK Solar (NYSE: LDK) closed up over 6% today in normal trading and shares are up another 5% at $17.70 in after-hours trading.
  • Canadian Solar Inc. (NASDAQ: CSIQ) closed up 2.6% in regular trading and its stock is up 7.5% at $9.50 in after-hours trading.
  • GT Solar International, Inc. (NASDAQ: SOLR) rose almost 8% today, and its stock is up 4.6% at $4.29 in after-hours trading.
  • Even the speculative Evergreen Solar Inc. (NASDAQ: ESLR) is up 14% at$2.87 in after-hours trading after closing down in regular trading..

The company did note gross margins declining sequentially but said that2008 net sales would be $1.22 billion to $1.24 billion. It also said that 2009net sales would be $2.0 billion to $2.1 billion with operating margins of 33%to 34%.  First Call has 2008 targets at $1.21 billion and has 2009targets at $2.13 billion. 

As long as an analyst doesn’t kill the stock with overly strong demandsor a downgrade in the morning, then this ought to be enough to helpmany of the other solar suppliers regain some lost ground.

 

HERE WAS THE ORIGINAL STORY BEFORE GUIDANCE……

First Solar, Inc. (NASDAQ: FSLR) posted earnings of $1.20 per share on$348.69 million in revenue.  First Call had estimates for this quarterof $1.01 EPS and $339.29 million in revenue.

If the company offers guidance in its conference call, its nextquarter’s estimates are $1.23 EPS and $409.27 million in revenue, andFiscal DEC-2009 estimates are $6.71 EPS and $2.13 billion in revenue.

If the company’s targets are met for 2008 at $3.68 EPS and $1.21billion in revenue, First Solar will trade at 32.7-times earnings and8.1-times revenues.  So this is still trading at much higher multiplesthan many growth stocks, but it is no longer at levels which cannot besustained.

Shares closed up almost 1.5% at $115.75 and shares are floating up anddown between positive and negative right after the earnings.

Jon C. Ogg
October 29, 2008