First Solar Q1 Preview: How Are Bookings Trending?

First Solar (NASDAQ:FSLR) is expected to publish its Q1 2018 results on Thursday, April 26. The company’s revenues are expected to decline over 2018, as shipments trend lower amid its ongoing transition from Series 4 to series 6 panels, a potentially lower mix of project sales and lower per watt prices. However, for this quarter we will be watching the company’s progress in bolstering its bookings while executing on its manufacturing transition.

We have created an interactive dashboard analysis showing our expectations for First Solar over 2018. You can modify the key drivers to arrive at your own forecasts and valuation for the company.

The Strong Trend Of Bookings Should Continue

First Solar is seeing some tailwinds from the imposition of import duties on silicon-based panels and cells, to which its Cd-Te based products are not subject. As of mid-February, the company noted that it added about 1.3 GW to its backlog year-to-date 2018 as customers are likely to be favoring the company’s products over silicon peers due to cost consideration. Although the benefits are unlikely to last for very long, given that the company’s competitors are building manufacturing capacity in the U.S., and also because tariffs are set to progressively reduce and eventually expire in 2022, the company could nevertheless benefit from stronger booking activity.

Series 6 Transition Updates

First Solar is currently transitioning from its Series 4 modules to its next-generation Series 6 modules, with its facilities in Ohio expected to begin high volume production from Q2. Although the transition could mean that the company will face a slight decline in shipments compared to 2017, it is likely to bring several long-term benefits, including lower panel production costs, higher efficiencies and more cost-effective deployment for customers. We will be looking for updates on how the transition is progressing.

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