Boston, MA 04/09/2014 (wallstreetpr) – Shares of First Solar, Inc. (NASDAQ:FSLR) rose more than 20 percent in the past two weeks. That happened after the company issued compelling financial outlook for fiscal 2015 and 2015. The company stated that it expects 2015 earnings per share to come between $4.50 and $6. The consensus is below $4 per share. For the fiscal 2016, the model expects earnings per share to fall between $3.50 and $5.
The company generates majority of its revenue at two thirds from utility solar power installations. This business was booming in the U.S. in the past year until most of its clients attained regulatory renewable energy requirements. In other words, a slowdown is setting in the segment of utility solar projects.
The environment of low utility-scale orders is likely to impact the revenue of First Solar. However, it is good to note that the company is pursuing other avenues to ensure that its earnings growth remains in place for the long term.
Drop in utility-scale projects
In 2013, installation of utility solar projects increased by more than 58 percent, thus accounting for about 60 percent of all solar installations in the U.S. According to Goldman Sachs, utility solar projects in the U.S. are expected to grow marginally at 8 percent through 2016.
The good news is
However, even as major solar contracts are expected to shrink, all is not lost for First Solar, Inc. (NASDAQ:FSLR). Market projections show that residential, industrial and commercial rooftop projects will be able to grow by 45 percent through 2016.
First Solar’s reputation in the solar power business space will be an added advantage when it turns to earn from rooftop projects. The company is reputed for high-efficiency panels and top-level engineering skills. Its presence in the rooftop market is currently very small, but the company expects to rapidly expand its market share given the market advantages it already possesses.
In the conclusion
First Solar, Inc. (NASDAQ:FSLR) will still be able to land major solar projects in markets such as Europe and Asia where the need for renewable energy is still high.
