First Solar Heads For All-Time Lows

Just when you think it couldn’t get any worse for First Solar (FSLR)… well, it does and the stock is rapidly closing in all time lows not seen since the stock went public about five years ago. The stock is down more than 20% and around the lows of the day after the company announced it’s slashing guidance for this year and next, laying off 1% of its work force and the departure of another executive. This time the CFO. Once the darling of the US solar market, this is a company in complete disarray and it’s going to take some serious work by Ahearn to restore confidence.

The company now sees revenue this year in the range of $2.8 – $2.9 billion vs the previous estimate of $3 to $3.3 billion and the Wall St estimate of $3.2 billion. Full year 2011 EPS is estimated at $5.75 – $6/share which is well below the analyst estimate for $6.88/share. It’s also guiding lower for next year and now sees full year revenue in the range of $3.7 – $4 billion and EPS at $3.75. Wall St estimates called for $4.1 billion in revenue and $7.42 in profits. That’s the key number and likely what traders are focusing on this morning. They are now pricing in a dismal year for next year too and it’s going to be a long time before this stock fully recovers (at least 6 months to a year).

Chairman and now (again) CEO Mike Ahearn said the company would be begin focusing its business on sustainable markets rather than subsidized markets where he hopes to derive most of the company revenue by 2014. (See guidance update call transcript here.)

“Our diverse business model and robust project pipeline will help First Solar generate a significant amount of cash in 2012 while improving operational efficiencies, but we are recalibrating our business to focus on building and serving sustainable markets rather than pursuing subsidized markets,” said Ahearn. “By channeling our core strength in utility-scale PV systems to markets with immediate need for mass-scale renewable energy our goal is to earn substantially all of our new revenues from sustainable markets by the end of 2014."