First Solar, Inc. FSLR 2011 guidance increases for the bottom line pointing to better margins than originally guided for, Piper Jaffray writes.
“After 3Q10 manufacturing costs rose as efficiency improvements were implemented, 4Q10 costs dropped $0.02 sequentially with management reiterating its commitment to continue on its cost reduction roadmap,” Piper Jaffray writes.
“Lower costs were already benefitting margins in 4Q as revenue missed guidance but EPS beat. We believe continued lower costs are the driver for the raise in 2011 EPS guidance to $9.25-$9.75 ($8.75-$9.50 previously), pushing closer to our forecast which we largely hold in place. Upside could come from better than expected pricing and/or EPC shipments which management says could be as high as 700MW in 2011.
“Additionally, management says Balance of System Costs (BOS) are down 30% since 2008, which puts FSLR's system costs very close to grid parity, a compelling advantage over competitors.”
First Solar, Inc. closed Thursday at $164.68.
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