First Solar Inc (NASDAQ:FSLR), the prominent American solar panel manufacturer, reported its fourth quarter and full-year 2025 financial results after the market close on Monday. The company delivered a quarter of solid revenue growth but fell short on profitability, a combination that has triggered a sharp negative reaction from investors in after-hours trading.
Quarterly Performance: A Revenue Beat, An EPS Miss
For the fourth quarter of 2025, First Solar posted net sales of $1.68 billion. This figure represents a notable 11.1% increase compared to the $1.51 billion reported in the same quarter last year and surpassed the analyst consensus estimate of approximately $1.59 billion. The growth was primarily driven by a higher volume of solar modules sold during the period.
However, the company's bottom-line performance did not meet Wall Street's expectations. First Solar reported net income per diluted share of $4.84. This result came in below the analyst estimate of $5.24 per share, a miss of approximately 7.6%. The earnings shortfall appears to be the primary catalyst for the market's negative response.
Market Reaction and Full-Year Context
The immediate market reaction was severe. Following the earnings release, First Solar's stock plummeted roughly 12% in after-hours trading. This sell-off underscores the market's focus on the earnings miss and its implications for future profitability, overshadowing the positive revenue performance.
For the full year 2025, the company reported net sales of $5.22 billion, a significant 24% increase from the $4.21 billion in 2024, driven by a 24% rise in third-party module volume. Full-year net income per diluted share was $14.21.
2026 Guidance: A Cautious Outlook
Perhaps more critical for investor sentiment was the company's financial guidance for 2026. First Solar provided a detailed outlook that, at its midpoint, suggests a year of stabilization rather than continued rapid growth.
- Net Sales: The company forecasts 2026 net sales between $4.9 billion and $5.2 billion. The midpoint of this range, $5.05 billion, falls approximately 17.4% below the current analyst consensus estimate of $6.12 billion for the year.
- Adjusted EBITDA: Guidance for Adjusted EBITDA is set between $2.6 billion and $2.8 billion.
- Volume: The company expects to sell between 17.0 and 18.2 gigawatts (GW) of modules.
This conservative sales outlook, coupled with the fourth-quarter earnings miss, has clearly disappointed investors who may have been anticipating more robust growth projections.
Key Highlights from the Earnings Release
Beyond the headline numbers, the earnings release highlighted several important strategic and financial developments:
- Strong Balance Sheet: The company's financial position strengthened considerably. Its net cash balance (cash and equivalents less debt) increased to $2.4 billion at the end of Q4, up from $1.5 billion at the end of the prior quarter. This boost was largely due to proceeds from the sale of advanced manufacturing production tax credits (Section 45X credits) and operating cash flows.
- Strategic Expansion: CEO Mark Widmar noted the continued growth journey, citing the commissioning of a new factory in Louisiana and the decision to establish a new facility in South Carolina.
- Operational Discipline: Management emphasized its "disciplined approach to contracting" and its core principle of "pricing and delivery certainty" as key differentiators in a rapidly evolving market.
Conclusion
First Solar's Q4 2025 results present a mixed picture. While the company demonstrated strong revenue growth and a significantly fortified balance sheet, it failed to meet profit expectations for the quarter. The market's sharp negative reaction is primarily attributed to the earnings per share miss and, more significantly, the company's 2026 sales guidance, which is substantially below current Wall Street forecasts. This suggests investors are recalibrating their growth expectations for the solar manufacturer in the coming year.
For a detailed look at First Solar's historical earnings, future estimates, and analyst projections, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer to buy or sell any security. Investing involves risk, including the potential loss of principal.
