"C4Q09 results vs expectations. FSLR reported 4Q09 Rev/EPS of $641.3mm and $1.65 above CS estimate of $588.7mm/$1.55 and street estimates of $577.6mm/$1.51.Upside relative to our estimates was driven by (i) Higher panel production; (ii) Higher system completions; (iii) Lower tax rates; (iv) Offset by lower gross margins and higher opex.
4Q09 key metrics. (i) Module GM of ~49.3% was lower than guidance of ~50- 51%, company claimed due to lower pricing for 21MW AC Blythe project, need also 10-K color; we think energy from the Blythe project was priced below 2007 MPR of $9.84c/kWh; (ii) 4Q shipments were 311MW (up 6% q/q), slightly better than our estimates of 293MW as panel efficiencies and line throughputs were higher than our model; (iii) We estimate there was ~45.6MW of system installs in 4Q09 (comprising of Blythe and Sarnia projects) for a systems revenue of $151mm in 4Q09 (we will revise this after company’s 10-K is filed), this was likely ~$15mm more than our estimate; (iv) We estimate module ASPs were $1.66/watt in C4Q09 (down ~4.4% q/q) lower than our assumption of $1.70/watt (contributed to GM miss mentioned above); (v) Panel manufacturing costs were 84c/watt (down 1% q/q) – but “core” manufacturing cost excluding ramp costs was down 2c/watt q/q to 82c, which was better than our estimate of 84c/watt.
Going with my theses that many stocks are likely to stay range-bound over coming months and implied volatility will come down further, I am selling the following iron condor on FSLR:
- Buy to open April $125 calls
- Buy to open April $90 puts
- Sell to open April $95 puts
I just filled the order for $1.55 credit. Does the trade meet 5-10-20 test?
5% - No more than 5% of your portfolio - Check
10% - Trade has 12% cushion on the upside and 14% cushion on the downside - Check
20% - Max profit on the trade is 45% return after commissions - Check
For more on my 5-10-20 rule, go to 5-10-20
Good luck!
