First Solar (FSLR) was down Friday afternoon $3.85 to $152.23, as solar names slide on weak earnings from SunPower Corp. (SPWRA) and MEMC (WFR).
SunPower (SPWR) is down 14.8% to $28.37 after the company reported strong earnings for the third quarter, but issued lower full year earnings and revenue guidance.
WFR is off $1.57 to $13.86 after the company reported a 29-cent per share loss. The company cites price reductions for wafers used in solar applications for one reason for the loss.
YGE, LDK, JASO, ASTI, and FSLR are all trading lower.
For First Solar, the decline comes ahead of an October 28 earnings release and as the stock has traded within a relatively narrow trading range, mostly between $145 and $158 per share, for more than a month. There is a sense of uncertainty building about business conditions for the Tempe, AZ, solar power company.
The stock is up more than 30% from its early September lows, but also 12% below the levels seen before the company's last earnings release.
FSLR gapped down and suffered an 11% loss on July 31 when the company reported earnings that easily beat Street estimates, but then failed to offer adequate guidance about the future. Investors and analysts are concerned about persistent price declines and excess supply. During its last earnings call, First Solar said it initiated a rebate program designed to drive sales in Germany.
For that reason, investors will be listening to what FSLR has to say about sales and the future outlook, not just the third quarter results. Obviously, the disappointing results from WFR and SPRWA do not set a very positive tone heading into the news. It is a sign that industry trends might not be shaping up as swiftly as previously expected.
Regards,
Fred Ruffy
Senior Options Strategist, WhatsTrading.com
TradeKing All-Star Commentator
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