First Solar slides on guidance cut weighed by India headwinds, lower sales volumes

First Solar (NASDAQ:FSLR) -2.6% in Wednesday’s trading, well off opening lows, after the solar equipment maker cut net sales guidance for the full year, even while reporting an increase in Q3 profit helped by higher prices following additional tariffs on foreign-made panels.

Q3 net income rose to $312.9M, or $2.91/share, from $268.4M, or $2.50/share, in the year-earlier quarter but fell from $349.3M, or $3.25/share, in Q2, and Q3 net sales rose to $887.6M from $801.1M in the prior-year quarter but fell from $1.0B in Q2, with the declines driven primarily by lower MW volume sold and a product warranty reserve charge.

First Solar (FSLR) issued lower guidance for FY 2024, including earnings of $13.00-$13.50/share from its previous outlook for $13-$14/share, and revenues of $4.1B-$4.25B from prior guidance of $4.4B-$4.6B, compared to analyst consensus estimates of EPS of $13.49 and revenues of $4.44B.

Operational challenges and India market headwinds drove the downside Q3 results as well as full-year volume and revenue guidance, Morgan Stanley analyst Andrew Percoco said in maintaining his Overweight rating but lowering his stock price target to $297 from $329.

Decision-making around India manufacturing, resulting in a shift toward selling India products in the U.S., has led to reduced volumes, J.P. Morgan’s Mark Strouse said while keeping his Overweight rating and saying First Solar (FSLR) remains best positioned among peers.

On First Solar’s (FSLR) earnings conference call, executives said the company has notified several large rivals that it believes they are infringing on its patents on a leading solar technology.

The company said it sent letters to Canadian Solar (CSIQ), JinkoSolar (JKS), Trina Solar, JA Solar, and Longi.