As was expected (and priced to a degree), FSLR US reported 4Q earnings this morning and issued FY25 guidance, both were below consensus, though everything we’ve read and heard from the buy side (fund mangers rather than sell side brokers) was an expectation that this result would be on the softer side.
- Q4 net sales of $US1.51 billion was ahead of expectations for $US1.48 billion
- Earnings missed, with operating income of $456.8 million relative to consensus of $559.8 million on higher costs.
- Earnings per share of $3.65 relative to consensus of $4.73
FY25 Guidance the key for FSLR, and there has been some trepidation around this for the past few months as sentiment towards renewables has waned, and they’ve been dealing with some internal manufacturing issues.
For FY25, net sales guidance of $US5.3-5.8bn is inline with consensus of $5.52bn with net profit guidance of US$1.95bn to $US2.30bn. At the midpoint this is ~$US300m or ~13% below consensus on slightly weaker margins and ~$200m more capital expenditure ($US1.4bn total). This translates to earnings per share (EPS) guidance of $US17-$US20, which compares to consensus of $US20.66 – a 10% miss. They expect volume sold of 18GW to 20GW for the year
- We’d expect the stock to initially trade lower on the headline miss; however, we do stress that it seemed to us that sell side consensus was a lot higher than the buy side was expecting. We did trim our position ahead of this result, down to a 4% target (from 6%).
MM remains bullish FSLR US, though with a lower conviction & smaller position
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