First Solar reduces its annual sales and profits forecast due to near-term tariff problems
First Solar lowered their annual sales and profits forecasts on Tuesday, citing near-term challenges due to the ongoing U.S. - China trade war. They also cited a tepid demand for residential solar in the United States. This sent its shares down by 11% after hours trading.
The U.S. demand for residential solar has been weakening due to high rates of interest and new metering regulations in California, the top market. These reforms have decreased the credits that customers get when they feed excess electricity into the grid.
In the first week of this month, U.S. officials finalized high tariffs on solar cells imported from Southeast Asia after American manufacturers complained about the cheapness of the goods.
The surge in solar imports that began in 2023, despite additional tariffs, has not resulted as anticipated in an increase in module prices.
Mark Widmar, CEO of First Solar, said: "Despite the challenges presented by the tariff regime in the short-term, we are confident that the long-term outlook is strong for solar demand. This includes our core U.S. markets. First Solar will be well-positioned to meet this demand."
The company's net sales for the current year are expected to range between $4.5 and $5.5 billion. This is a significant increase from its previous forecast of $5.3 to $5.8billion.
Solar company predicted earnings of between $12.50 and $17.50 per shares in 2025, as opposed to its previous forecast of profits of between $17.00 and $20.00 per shares.
The company reported net income of 209.5 million dollars for the quarter ending March 31. This is down 11.4% from the previous year.
First Solar's net sales for the first quarter were $844.6 Million, an increase of 6.4% over the same period in the previous year.
It reported an average price of 30.5cents per watt. This is down 2.6% from the previous quarter. Reporting by Vallari Shrivastava in Bengaluru and Pooja menon; editing by Mohammed Safi Shamsi
(source: Reuters)
