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First Solar (FSLR) reported its fiscal Q3 2026 results after the market closed on October 29, 2026. The stock fell 1.4% the next day, slightly less than the S&P 500’s 1.8% drop. In the same release, management lowered its sales forecast for the year. The board also approved a share buyback of up to $500 million. For anyone who owns the shares, does a smaller sales year change the reason to hold First Solar?
Photo by Michael_Pointner on Pixabay
Photo by Michael_Pointner on Pixabay
First Solar Expects Unchanged Gross Profit For 2026
Based on management’s own numbers, the smaller sales year does not change the case for holding. First Solar lowered its 2026 sales forecast to $4.75 billion at the midpoint, from $5.05 billion in July, but kept its gross profit forecast at $2.5 billion. Its adjusted EBITDA forecast, management’s measure of profit before interest, taxes and depreciation, slipped only to $2.65 billion at the midpoint, from $2.7 billion.
First Solar’s gains have come from higher profit on each sale, not from sales growth. Gross margin was 57.9% in fiscal Q3 2026, against 38.3% a year earlier, and management credited a higher mix of modules made in the U.S. The stock trades at 11.2 times the past twelve months’ earnings, against 22.8 for the S&P 500.
On the day, the market appears to have treated the report as little news. Other solar stocks fell by similar amounts that day, with Sunrun down 1.4% and SolarEdge down 1.6%. From the close on the report day to November 4, First Solar stock rose 10.0%, while the S&P 500 slipped 0.4%. The stock rose 4.6% on November 4 alone, when solar stocks rallied after the midterm election results.
Why Is First Solar Selling Fewer Modules?
Management cut the forecast because it now expects to sell fewer modules from its India facility, its international Series 6 lines and its U.S. finishing operations. For India alone, it lowered its forecast for the year by about 0.7 gigawatts.
Sales have now fallen from a year earlier for two quarters in a row, dropping by 3.7% in fiscal Q2 2026 and by 22.8% in fiscal Q3 2026. Management attributed the latest drop to fewer modules sold to third parties.
Management also described a change in how customers buy. Buyers are signing contracts for specific projects and putting off orders for early-stage projects that need modules later in the decade. Management said this could slow the growth of its multiyear backlog.
At the same time, management said it has raised prices since the Section 232 proclamation issued in August, which it believes leaves First Solar well placed. Management called the proclamation a meaningful shift for U.S. solar manufacturing. When the level of those new prices came up on the October 29 call, management would not give a figure.
What Should First Solar Holders Watch In February?
First Solar’s gross profit for the full year 2026 is the figure to watch against the forecast management left unchanged in October. The company is expected to report it in February 2027.
Still Holding First Solar After The Drop?
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