The Sun Shines on FirstSolar in 2Q15 as SunEdison Faces Headwinds

(Continued from Prior Part)

While FirstSolar (FSLR) surged after its 2Q15 results, SunEdison (SUNE) slumped after its earnings announcement. SUNE lost 25.3% on August 6, the day it announced its 2Q15 earnings. The stock has been in a downtrend since then.

The company’s revenues at $455.0 million came in 11.4% higher than the consensus expectation of Wall Street analysts surveyed by Bloomberg. However, its loss per share (or LPS) at $0.89 was way higher than analysts’ expectation of $0.61. Adjusted LPS, which excludes the non-recurring part of earnings, came in at $0.75, 46% higher than what analysts had projected.

TerraForm Power (TERP) lost 11.0%, TerraForm Global lost 17.5%, and SUNE’s acquisition target, Vivint Solar (VSLR), lost 8.7% on August 6 following SUNE’s poor showing. The stock has lost 57% since the end of 2Q15 and has given up its title of most valuable (by market capitalization) American renewable energy company. FirstSolar (FSLR) now ranks first.

In 1H15 and a few weeks thereafter, SunEdison (SUNE) remained the favorite solar stock for investors and traders. The stock defied industry-wide issues to surge 53% in 1H15. Interestingly, the stock performed well in both 1Q15 and 2Q15, gaining 24.6% and 23.0%, respectively. Aggressive acquisitions and continued diversification helped the company’s stock during most of 1H15. However, the slump started right after SUNE’s announcement of its proposed VSLR acquisition because SUNE is paying a hefty premium to acquire VSLR. SUNE is part of the SPDR S&P500 ETF (SPY).

How does the near future look for FSLR and SUNE? Let’s find out in the following parts of this series.

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Browse this series on Market Realist:

• Part 1 - SunEdison and FirstSolar Publish Their 2Q15 Earnings
• Part 2 - Why Analyze FirstSolar and SunEdison’s 2Q15 Earnings Together?
• Part 3 - Southern Company Helps FirstSolar’s Revenue Rise 65% in 2Q15