First Solar (FSLR) to Report Q3 Earnings: What's in Store?

First Solar, Inc. FSLR is scheduled to report third-quarter 2018 results on Oct 25, after the market closes. Last quarter, the company reported a negative earnings surprise of 2,200%.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

China and certain international markets has been witnessing decline in average selling prices (ASPs) for solar modules, due to oversupply across the value chain. This trend is expected to get reflected in the company’s soon-to-be-reported results, in the form of dismal top-line performance.

Moreover, the company is lately witnessing uncertainty associated with project sale timing that may hurt its revenue growth. In line with this, the Zacks Consensus Estimate for First Solar’s third-quarter revenues is pegged at $683.9 million, reflecting an annual decline of 37.1%.

Such lower sales are expected to get translated into reduced bottom-line figures in First Solar’s third-quarter results. Meanwhile, rising operating expenses associated with increased production of Series 6 modules are expected to weigh on the company’s earnings in the upcoming release. In fact, the company reduced its 2018 gross margin expectation to reflect these impacts, thanks to rising aluminum cost.

Consequently, the Zacks Consensus Estimate for First Solar’s third-quarter earnings, which is pegged at 45 cents per share, reflects an annual decline of 76.9%.

First Solar, Inc. Price and EPS Surprise

First Solar, Inc. Price and EPS Surprise | First Solar, Inc. Quote

Earnings Whispers

Our proven model does not show earnings beat for First Solar this quarter. That is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. That is not the case here as you will see below.

Earnings ESP: First Solar has an Earnings ESP of -7.26%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: First Solar’s Zacks Rank #4 (Sell) when combined with a negative ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few operators in the Zacks Oil-Energy sector that you may consider, as our model shows that they have the right combination of elements to deliver an earnings beat this quarter:

SunPower Corp. SPWR is slated to report third-quarter results on Oct 30. The company has an Earnings ESP of +57.30% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Enphase Energy ENPH is expected to report third-quarter results on Nov 6. The company has an Earnings ESP of +6.67% and a Zacks Rank #3.

Anadarko Petroleum APC is expected to report third-quarter results on Oct 30. The company has an Earnings ESP of +1.90% and a Zacks Rank of 2.

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Anadarko Petroleum Corporation (APC) : Free Stock Analysis Report
 
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