"First Solar Drops 10%: Needham Throws in Towel, Deutsche Defends Margins" (FSLR)

Last week I was asked why I didn't have any "Stocks for the Paris Climate Talks" or somesuch.

As the 12-year old girls used to say, "Well duh".

Look at the descriptor under our blog name and yes, I know it has said "Funny Fatters", and from time to time "Punny Patters" and "Live long and Prosper" when Nimoy died but it usually says "Money Matters".

From Barron's:

Shares of solar energy provider First Solar (FSLR) are down $5.80, or almost 10%, at $53.05, after the company last night projected sales for 2016 ever so slightly below analysts’ expectations, but projected profit above consensus, and offered an outlook for gross profit margin that was disappointing to many.

The company sees 2016 revenue in a range of $3.9 billion to $4.1 billion, which, at the midpoint, $4 billion, was slightly below consensus of $4.05 billion. The company sees EPS of $4 to $4.50, comfortably ahead of the average $3.94 estimate on the Street.

The bigger issue for many was an outlook for gross profit margin in a range of 16% to 18% for 2016, down from the company’s expected 24% to 25% this year.

Further detailed is provided in a set of slides posted on the investor relations Web site.

Needham & Co.’s Edwin Mok cut his rating on the shares to Hold from Buy, writing that the lower margin outlook is an ominous portent of a new normal:

Weak gross margins guidance a preview to future margins profile. 2016 GM guidance of 16-18% is substantially below the 2015 range of 24-25% and even 4Q15 run-rate of ~20%. The weaker GM is due to: 1) unfavorable mix of higher EPC sales; 2) shortened time to COD for some projects, resulting in less margin captured; and 3) no rev/GM of Stateline, impacting GM by 200bps. Unfortunately, mix of EPC-based contracts will increase as international ramps up, and project pricing will likely step down post ITC. As a result, we are modeling GM in 2017 to further decline to 15.8%. 
Mok sees a sharp decline in revenue in 2017:...MORE

Here's the larger of the two solar ETF's:

And First Solar itself:


COP 21 opened November 30, you'd be underwater.
This trading pattern seems to happen more often than not during the big confabs.
The next phase will be a pop when they announce a deal and then sadness when understanding of the deal begins to permeate.

Bunny batters?