First Solar cuts 2026 sales outlook to $4.6–$4.9 billion despite quarterly profit growth
Key Facts
First Solar cut its 2026 sales and module shipment forecasts after reporting net sales of $1.23 billion in the third quarter, down 23% year over year, according to a company statement on October 29. The company attributed the quarterly decline primarily to lower module volumes sold to third parties. By contrast, net income rose to $571 million, or $5.30 per diluted share, from $456 million and $4.24 per share in the same quarter of 2025. Adjusted EBITDA was about $744 million, compared with $671 million a year earlier. The results were mixed: earnings exceeded analyst expectations, while sales fell short, alongside a cut to the full-year outlook.
Diluted earnings per share were $5.30, above the analyst estimate of $4.67, while sales were $1.23 billion versus expectations of $1.28 billion, according to Investing.com. Gross margin rose to about 58%, an increase of about 20 percentage points from the third quarter of 2025. Investing.com linked the margin improvement to a higher share of U.S. modules in the mix, lower freight and underutilization costs, and lower tariffs. But stronger profitability was not accompanied by revenue growth, as annual sales fell with lower module volumes sold to third parties. After the results were announced, the stock fell 2.2% in after-hours trading to $173, from the regular-session close of $176.89 on October 29.
The company lowered its 2026 net sales outlook to $4.6–$4.9 billion from $4.9–$5.2 billion, and trimmed its Adjusted EBITDA forecast to $2.55–$2.75 billion from $2.6–$2.8 billion. Its expected module volume range is now 16.0–17.0 gigawatts, down from 17.0–18.2 gigawatts; the previous low end was 17.0 gigawatts. The revision also covered capital spending, with the company lowering its range to $0.6–$0.8 billion from $0.8–$1.0 billion. Management said the revised annual outlook reflects lower volumes of modules sold in India, international Series 6 modules and U.S. finishing, with corresponding reductions in revenue and Adjusted EBITDA. It added that its domestic sales outlook in India fell by about 0.7 gigawatts.
First Solar expects fourth-quarter module sales of 4.3 to 5.3 gigawatts, including 3.4–4.3 gigawatts from its U.S. manufacturing operations, and Adjusted EBITDA of $643 million to $843 million. Its contracted sales backlog stood at 44.0 gigawatts on September 30, 2026. Management said customers are increasingly moving toward contracts tied to specific projects and known delivery schedules, which improves certainty in module allocation but may slow growth in the multiyear contract backlog. Net cash fell to $1.5 billion at the end of September from $2.4 billion on December 31, 2025. The company attributed the decline to working capital needs and capital spending, partly offset by proceeds from 45X credits and IEEPA tariff refunds.
The board authorized a share repurchase program of up to $500 million, effective immediately and without a specified expiration date, though the company is not obligated to buy any particular amount. Chief Executive Mark Widmar linked the company's direction to U.S. industrial policy, saying that “Section 232 represents a structural change in how the United States approaches solar manufacturing.” Management said about 80% of its global module manufacturing footprint will be in the United States by 2027. In India, the company expects completed module production of 2.2–2.6 gigawatts in 2027, with the facility's conversion to Series 7 set to begin in the first quarter of that year. For the Malaysia facility, management expects to decide in the first half of 2027 whether to operate it at or near its annual capacity of 120 gigawatts, or halt production.
The company scheduled its third-quarter results call for October 29, 2026, at 4:30 p.m. Eastern time, and announced that a replay would be available through November 28, 2026. The call put discussion of the results and outlook on the same day as the announcement. The cut to sales and module volume forecasts comes as the company relies on a greater U.S. manufacturing presence in its future footprint. The India outlook for next year shows expected production alongside the facility's conversion to Series 7. Malaysia operating options also remain among the decisions expected in the first half of 2027, according to management's remarks on the earnings call.