First Solar Revenue (FSLR), Q4 2021

A worker installs First Solar Inc. photovoltaic solar panels. at the Agua Caliente solar project in Yuma County, Arizona.

Joshua Lot Bloomberg | Getty Images

Shares of First Solar fell more than 16 percent during extended trading on Tuesday after the company reported missing earnings expectations in the fourth quarter and issued weak guidelines for the full year.

The solar panel manufacturer is facing rising costs for raw materials and bottlenecks in the supply chain.

Here’s how the company did in its fourth quarter results compared to Refinitiv’s estimates:

  • EPS: $ 1.23 per share compared to the expected $ 1.06
  • Revenue: $ 907 million versus $ 918 million

First-year management of First Solar also did not meet Wall Street’s expectations. The company expects revenue of between $ 2.4 billion and $ 2.6 billion, while Wall Street is pushing for $ 2.76 billion.

The company expects earnings per share to be between profitability and 60 cents for the full year, well below the $ 1.92 analysts had expected.

Solar’s first CEO Mark Widmar said the solar industry was facing a year of “supply chain, logistics, cost and pandemic challenges”.

The company also announced that it is at an advanced stage of discussions for the sale of its platform for development and operation and maintenance in Japan.

Looking ahead, Widmar said 2022 would be a “major year” with “significant investments” in production expansion, new producers, research and development and new negotiation strategies.

But during a conference call after the company’s quarterly update, management acknowledged that 2022 is expected to be a challenging year in terms of profits, especially due to increased transportation costs. Prices for agreed volumes have risen between 200% and 300% above pre-pandemic levels, First Solar said. In 2022, the company expects the agreed freight rates to jump by 100% on an annual basis.

Along with increased costs, transit times have also increased, while “reliability and availability have deteriorated significantly, pushing more volume into the higher-priced spot market”.

The company also pointed to rising raw material costs, including a 40% jump in steel prices in 2021.

This story is evolving, please check again for updates.