First Solar (FSLR), held in the Market Matters International Equities Portfolio, delivered a solid second-quarter result after market on Thursday, with earnings comfortably ahead of expectations and its contracted backlog extending through 2030. Shares were muted on Friday, but popped 10% overnight, making FSLR the strongest performer in the S&P 500 on Monday.
Key results:
- EPS of US$3.92, well ahead of consensus near US$2.90.
- Revenue of US$1.06 billion, broadly in line with expectations.
- Adjusted EBITDA of US$644 million.
- Contracted backlog of 45.1GW.
- Full-year sales guidance maintained at US$4.9–5.2 billion.
- Gross profit guidance maintained at US$2.4–2.6 billion.
First Solar also surpassed 100GW of cumulative global module sales, with management highlighting continued demand for its differentiated technology, US manufacturing footprint and delivery certainty. The main swing factor remains US trade policy, and we may get some news on this shortly, specifically around the Section 232 investigation into imported polysilicon and related tariffs, which could materially influence the economics of domestic solar manufacturing and First Solar’s competitive position.
Overall, the 2Q result was solid, and we’ve seen a string of broker upgrades on the back of it, though PTs are going incrementally higher rather than materially higher. The regulatory overhang is the near-term swing factor, but we continue to think First Solar is well placed to benefit from greater protection for domestic manufacturing.
MM remains long & bullish FSLR US ~$US230
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