What Might the Q3 Report Look Like for First Solar?
Next Thursday, First Solar Inc. will report its earnings for Q3 of this year and the industry and investors wait impatiently. First Solar has set incredibly aggressive goals for itself and naturally there is skepticism on whether or not it can actually meet them.
The Tempe, Arizona-based company wants to bring the cost of solar systems to under $1 a watt by 2017. The U.S. government forecasts costs as being between $1.50 and $3 per watt for residential systems and between $1.50 and $1.95 per watt for commercial systems.
“That’s the most aggressive target in the industry,” Angelo Zino, an analyst with Capital IQ, told MarketWatch.
Predications for Q3 aren’t exactly optimistic, though they’re firmly mixed. Analysts are predicting earnings of $0.63 per share, down from $2.28 per share a year ago. Sales are also expected to drop from $1.26 billion in Q3 2013 to $1.05 billion. The outlook for the stock is positive, however, as it’s performing better than similar stocks.
Still, investors want more. They’re interested in First Solar’s larger-scale projects as well as its intent to diversify geographically. Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., spoke generally in a phone interview with Markets Emerging about the solar market—which saw a dip in stock prices across the board—about the importance of investor confidence.
“The market is driven primarily by trader and investor emotion and sentiment,” he said. “All that’s going to remain consistent in the short term is that volatility is going to continue and that you’re going to have significant swings just based on trader sentiment, without any specific data points.”
First Solar’s stock was slightly down this morning.
Drax advances biomass strategy with Pinnacle acquisition
The Group’s enlarged supply chain will have access to 4.9 million tonnes of operational capacity from 2022. Of this total, 2.9 million tonnes are available for Drax’s self-supply requirements in 2022, which will rise to 3.4 million tonnes in 2027.
The £424 million acquisition of the Canadian biomass pellet producer supports Drax' ambition to be carbon negative by 2030, using bioenergy with carbon capture and storage (BECCS) and will make a "significant contribution" in the UK cutting emissions by 78% by 2035 (click here).
This summer Drax will undertake maintenance on its CfD(2) biomass unit, including a high-pressure turbine upgrade to reduce maintenance costs and improve thermal efficiency, contributing to lower generation costs for Drax Power Station.
In March, Drax secured Capacity Market agreements for its hydro and pumped storage assets worth around £10 million for delivery October 2024-September 2025.
The limitations on BECCS are not technology but supply, with every gigatonne of CO2 stored per year requiring approximately 30-40 million hectares of BECCS feedstock, according to the Global CCS Institute. Nonetheless, BECCS should be seen as an essential complement to the required, wide-scale deployment of CCS to meet climate change targets, it concludes.