First Solar (Nasdaq:FSLR) will release its 4Q report for the year ended December 29, 2007, tomorrow shortly after the sun rises. (The conference call is scheduled for Wednesday, 13 February 2008 at 6:00 AM MST (8:00 AM EST).
Those of us who hold positions in the thin film solar manufacturer are eagerly awaiting the earnings report. Why?
During the short life-span of the stock, First Solar has been an overachiever, consistently beating the predictions of market analysts.
But that was before the steep dip back in January and, while it's been showing some signs of life again these past few days, it hasn't cracked $200 since January 16.
This has researchers, analysts, and pundits wondering how the stock will perform in the wake of the earnings announcement.
Andrea Kramer at Schaeffers Research asks, "Can FSLR keep up the trend of virtually laughing in the face of analysts? We'll see soon enough, as the company is slated to step into the earnings confessional before the market's open on Wednesday. This quarter, analysts are forecasting earnings-per-share of 53 cents on revenue of $179.48 million..."
"Should FSLR quarterly earnings perform the same way they always have, the chance for the stock's rebound back around its median target price is much more achievable than if earnings disappoint." Kramer wrote. "However, a weaker-than-expected earnings report could fuel analyst downgrades and price-target cuts – both potential catalysts lower."
Meanwhile, on CNBC last night, the other Cramer, Mad Money's Jim Cramer, suggested "oil will go back up and he would pick up some more First Solar. First Solar is currently trading at $194.60, below its $283 high," according the StreetInsider.com.
Down the street, David Gaffen at the Wall Street Journal, wonders if "investors may have had enough. The shares, which rose a ridiculous 795 percent in 2007, are down 29 percent in 2008, coming under a bit of pressure with the rest of the solar sector."
But when taken in the context of alternative energy overall, FSLR and other solar plays may rise again.
Over on the other side of the pond, Gunnar Millar, global co-head of Research Allianz Global Investors (AGI), told Reuters that "Alternative energy and solar energy are a very compelling growth opportunity and that's going to be a multi-decade phenomenon."
"It's going to be something on a par with volume growth of flat panel screens, PCs and handy phones," he said, while adding some companies had become over-valued. He didn't name any names.
And Thiemo Lang, senior portfolio manager at Sustainable Asset Management (SAM) was snapping up solar power stocks, saying last month's falls were an opportunity.
He said he expected demand growth to outstrip capacity because of government support plus its tiny base now at less than 0.1 percent of the world's electricity.
Broadpoint Capital also weighed in on First Solar specifically, saying they recommend sitting out the quarter due to excessively high investor expectations, but would be buyers on any weakness after results are announced.
They expect strong results and guidance, but believe plans for an additional factory, a large 100MW+ system contract, or significantly higher 2008 guidance are necessary to move shares higher.
Looks like FSLR closed @ 175 today; not quite the anticipatory uptick expected.
Give me a wake up call before 8AM, please.
Disclosure: Long FSLR