First Solar's supply chain worries drag down solar sector
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Enphase Energy (ENPH
-5.8%) and SolarEdge Technologies (SEDG
-5%) are Wednesday's two biggest losers on the S&P 500 after weak guidance from top U.S. PV panel maker First Solar (FSLR
-9.3%) indicates supply chain problems and rising costs will hurt earnings this year.
Solar equipment maker Array Technologies (ARRY
-22.1%) posts the solar group's (TAN
-4.1%) biggest drop after saying it would delay its 10-K filing; also sharply lower are RUN
-6.9%, MAXN
-6.1%, CSIQ
-5.5%, NOVA
-5.1%, SPWR
-3.2%, JKS
-2.3%.
"We will not be able to offset a number of the headwinds experienced in 2021 and therefore our module cost will be higher than our roadmap. This is expected to negatively impact 2022 gross margin by ~$100M," First Solar CEO Mark Widmar said during the company's earnings conference call.
The "real shocker," according to Raymond James analyst Pavel Molchanov, was First Solar's full-year GAAP EPS guidance of $0.00-$0.60, "weighed down by freight and aluminum costs as well as production start-up expenses... this range includes an estimated pre-tax gain on the Japan sale of $280M, equating to more than $2.00."
First Solar's expansion into India, where it is building a new manufacturing facility, "could be a game changer," Paul Franke writes in a bullish analysis posted on Seeking Alpha.