Key Points:
- First Solar’s stock dropped 14 percent after issuing a weak sales forecast.
- The company expects 2026 sales to fall well below Wall Street targets.
- Executives blame federal permitting delays under the Trump administration.
- New tariffs will cost the solar panel maker up to 135 million dollars.
First Solar, the biggest solar panel manufacturer in the United States, watched its stock price dive by nearly 14 percent this week. The steep drop happened after the company released a disappointing sales forecast for the upcoming year, spooking investors who hoped for stronger financial growth.
The Arizona-based company blames a tough political and regulatory environment for the upcoming slowdown. Executives stated that their customers currently face significant commercial challenges. Most notably, buyers are dealing with long federal permitting delays under the Donald Trump administration, which directly stalls new solar farm projects.
Tariffs represent another massive hurdle for the business. During a recent earnings call, Chief Financial Officer Alex Bradley warned that new trade penalties will hit the company hard. First Solar expects these tariffs to cost the business between 125 million and 135 million dollars in 2026 alone.
To handle these trade issues, the company made some tough operational choices. Management decided to intentionally slow down production and run at a very low utilization rate. They reduced output at their international manufacturing plants to buy time and see exactly how the new tariff rules play out. This production slowdown directly hurt their profit margins.
Because of these combined problems, First Solar significantly lowered its expectations for the year. The company predicts its 2026 net sales will land between 4.9 billion and 5.2 billion dollars. This forecast completely missed Wall Street estimates, as financial analysts originally expected the company to bring in more than 6.1 billion dollars.
However, the gloom over the future hides a surprisingly strong recent past. First Solar actually performed very well at the end of last year. For the quarter ending December 31, net sales reached 1.68 billion dollars, an 11 percent increase from the previous year. A higher volume of solar module sales drove this solid revenue growth.
Furthermore, the company reported a net income of 4.84 dollars per share, easily beating the 3.65 dollars per share it earned a year ago.
