Reuters: Global Markets: Analysts doubt bullish First Solar outlook, shares slip

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Analysts doubt bullish First Solar outlook, shares slip Apr 10th 2013, 16:09 Wed Apr 10, 2013 12:09pm EDT (Reuters) - First Solar Inc (FSLR.O) will need strong bookings to back up its revenue and profit estimates for the next three years, analysts said, as shares of the solar panel maker retreated as much as 8 percent a day after their biggest intra-day jump. The company's shares rose as much as 45 percent on Tuesday after the company forecast profit and revenue far in excess of most analysts' expectations and said it would buy Silicon Valley startup TetraSun. "The sudden tidal wave of bullishness is not going to sweep us off our feet," said Raymond James analyst Pavel Molchanov. He said short interest was running at 30 percent of the float. Short-sellers borrow shares and sell them, seeking to profit by returning them after buying them back at a lower price. First Solar's stock was down 5 percent at $37.33 in late morning trade on the Nasdaq. The company's bullish outlook failed to assuage analysts' concerns that First Solar was completing and selling solar projects faster than it was securing new orders. First Solar generates about two-thirds of its revenue from selling power plants to utilities. This business has kept it profitable, in sharp contrast to most other solar companies, which have been battered by a steep decline in panel prices. Molchanov forecast challenges in First Solar's ability to maintain and grow profitability as its legacy U.S. utility-scale projects gradually roll off. Analysts at UBS Investment Research wrote in a note that First Solar was bidding on 4 gigawatts of new projects, mainly in North America, the Middle East and India. "(We) believe it will need to convert 80 percent of those into bookings to meet its 2014 and 2015 guide," they wrote. First Solar said it expects to recognize revenue from its 550-megawatt solar power project in California, called the Desert Sunlight project, from the second half of 2013 until late 2014. ROOFTOP MARKET First Solar, the biggest producer of thin-film solar panels, is making a foray into silicon-based products with the acquisition of TetraSun, which builds solar panels for small rooftop systems. The company's panels are made from cadmium telluride, unlike traditional silicon panels. Its panels had long been the cheapest in the solar industry, but that advantage has eroded due to the sharp price decline in prices of silicon-based panels. The acquisition gives First Solar access to the rooftop solar systems market. The company plans to sell TetraSun products in Japan, which is expected to become a major solar market this year due to government subsidies. "The TetraSun acquisition is a step in the right direction toward rounding out FSLR's product offering beyond 2014," analysts at Piper Jaffray wrote in a note. Analysts at Robert W. Baird & Co said they did not expect the acquisition to be "a major driver of sales" in 2013 and 2014, although it would offer First Solar entry to the residential rooftop market. (Reporting by Swetha Gopinath in Bangalore; Editing by Joyjeet Das) Link this Share this Digg this Email Reprints

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