First Solar Reports 3Q Financials
Oct 31, 2008 – First Solar [Nasdaq: FSLR] reported its 3Q 2008 results today. Net sales for 3 months were $348K vs $159K in 3Q 2007. Nine month sales were $812K vs $ $301K in 2007. Diluted net income per share was $1.20 for 3 months and $2.63 for 9 months in 2008 vs $0.58 and $$1.24 in 2007 respectively. Their report says that “no single customer accounted for more than 22% of our net sales.” Of course, that means that one customer did account for 22%, which is a large amount. Hopefully, they will not lose that customer and the percentage of sales to that customer will decrease in 2009. FSLR is trading just over $140 and was previously $317 as recently as May 8, 2008. Even with the drastic reduction in its share price, the PE ratio is still over 50, but then again its growth rate is over 100%. Thus, it easily beats the rule of thumb of having a P/E roughly equal to the growth rate. Now, one has to see if they can keep up the growth in 2009 if the credit crunch and economic situation worsens. The same growth and stock price would bring a P/E of about 25. Drastically reduced growth would signal disappointment and a falling stock price.
Thanks for posting the article, was certainly a great read!