Ahead of the Bell: First Solar rises in premarket

NEW YORK (AP) — Shares of First Solar Inc. soared in Thursday premarket trading, a day after the nation's largest solar-panel maker said its first-quarter profit tripled, far exceeding Wall Street expectations.

First Solar shares climbed $23, or 15 percent, to $175 in premarket trading.

After the market closed on Wednesday the company reported it earned $164.6 million, or $1.99 per share, compared with $46.6 million, or 57 cents per share, for the same period last year. First Solar said numerous new power projects and slashed production costs boosted margins. Revenue jumped to $418.2 million, from $196.9 million during the same period last year.

Analysts surveyed by Thomson Reuters expected earnings of $1.50 per share on sales of $403.67 million.

Jefferies&Co analyst Paul Clegg, who rates the company "Buy," said he believes its cost structure will remain sufficient to post strong margins even if silicon prices continue to decline.

"If they continue to make rapid cost reductions, it may make it very difficult for competitors to catch First Solar on price even in a declining poly price environment, implying that current forecast margins are reasonable," Clegg said. He raised his full-year profit estimate to $7.57 per share from $6.87 per share. He also boosted his price target for First Solar to $215 from $170.

Deutsche Bank analyst Steve O'Rourke raised his price target to $167 from $150, but maintained a "Hold" rating.

"While we view First Solar as best of breed in the industry, we would not chase the stock right now," O'Rourke said.