First Solar (FSLR) Reports After Hours:

From Clusterstock (sums up things very well):

Key Metrics:

• Q2 EPS: $0.58 consensus, $0.70 whisper
  
• Q2 Revenue: $216.9 million consensus
• Gross Margin: 49% consensus
• 2008 Guidance/Consensus:
  • $975 million to $1.05 billion in revenues ($1.04 billion consensus)
    
  • 420MW to 460MW of shipments
  • $36 million to $39 million in plant start-up costs
  • $50 million to $52 million stock-based compensation
  • GAAP operating margin of 25% to 30% with a 28% to 30% tax rate
  • 83 million to 84 million fully diluted shares outstanding
  • $500 million in capex
  • EPS: $2.95 consensus
    

• 2009 Consensus
  
  • EPS: $5.84 consensus
    
  • Revenue: $1.88 billion consensus
    

We're looking for color on:

• speed, progress and outlook for the Malaysian plant ramp up
• how much margin pressure there will be in the near-term due to the high costs of ramping up in Malaysia
• strength of the US utility (and possibly residential) market demand with or without ITCs (Investment Tax Credits)
• likelihood of further subsidies around the world and FLSR strategy for taking advantage of them
• efficiency improvements
• possibility of a weaker Euro (the currency FSLR receives a vast majority of their revenue in)
• how they will respond to the increased competition as countless technology companies, from General Electric (GE) to Intel (INTC), take the plunge into solar

And, of course, any reassurances regarding the possible toxicity of their cadmium telluride (CdTe) cells, their supply of Tellurium (a rare element necessary for the production of their CdTe cells), and FSLR's insider stock sales.

http://www.clusterstock.com/2008/7/first-solar-fslr-q2-preview-market-expecting-a-blowout

The last paragraph needs emphasis. From early April, insiders have sold 577,907 shares for an average price of $276.28 for a total of $17,410,277. More importantly, ever since April, FSLR has been in the wide range the stock currently is in. Market is saying telling us something.

http://moneycentral.msn.com/investor/invsub/insider/trans.asp?view=All&Symbol=fslr


I also don't understand why everyone harps on FSLR's ability to create solar panels more cheaply (about half) than its competitors when it's can only convert half (or less) of the sunlight into electricity. To me, this sounds like you get what you pay for. FSLR doesn't sound relatively cheaper at all.

Industry Conversion Efficiencies

Manufacturer	Conversion Efficiency
SunPower(Polysilicon)	23.4%
Suntech Power Holdings(Polysilicon)	18%
Sharp (Polysilicon)	13%
Kyocera (Polysilicon)	18.5%
Solarfun (Polysilicon)	17.2%
JA Solar Holdings (Monosilicon)	17.7%
Trina Solar(Mono & Polysilicon)	16.6%
Evergreen Solar (String Ribbon)	15%
EMCORE (GaAs Concentrated Solar System)	37%
Energy Conversion Devices (Amorphous Silicon Thin Film)	8.5%
First Solar (CdTe Thin Film)	10.5%
DayStar Technologies(CIGS Thin Film)	14%
Ascent Solar (CIGS Flexible Thin Film)	9.5%

http://www.wikinvest.com/stock/First_Solar_(FSLR)


Lastly, FSLR carries a HUGE risk exposure to cadmium telluride. The more I read up about this substance the more idiotic the manufacturing process sounds. Why would anyone pick an "alternative" form of energy that is scarcer than. To add, the substance may be banned as illegal in Europe due to its extreme toxicity.


I am doing to stick my head out and stick with my short call. I sell $30 up and $80 down.

Current Price: $283.64