First Solar plunges after CEO sounds the alarm on tariffs
The company said it expects to pay up to $90 million in tariffs this year.
First Solar, the largest US manufacturer of solar panels and modules, said President Trump’s tariff policies pose “a significant economic headwind” that will weigh on its bottom line this year.
The company also missed Wall Street’s profit estimates for the first three months of the year, reporting adjusted earnings per share of $1.95, much less than the $2.49 analysts polled by FactSet penciled in. But perhaps more concerning to investors is what First Solar thinks is in store for the rest of the year.
First Solar, which analysts had previously considered well positioned against tariff threats because it doesn’t rely on China, also cut its sales guidance for 2025 from between $5.3 billion and $5.8 billion to between $4.5 billion and $5.5 billion. The company said it expects to pay up to $90 million in duties for imported materials and components. It also expects to take a hit of up to $270 million from underutilization charges for lowering capacity at its factories in Malaysia and Vietnam.
“While the implementation of certain new trade policies was a possibility with the change in administration, the new tariff regime imposes — earlier this month has introduced significant challenges to 2025 that were not known at the start of the year,” First Solar CEO Mark Widmar told analysts.
First Solar has factories in Malaysia and Vietnam, which almost exclusively serve the US market, and a factory in India that serves the region as well as North America. On April 2, Trump imposed tariff rates of 26%, 24%, and 46%, on India, Malaysia, and Vietnam, respectively. While those tariffs are on a 90-day pause, the 10% universal tariff rate still weighs on the company’s bottom line, Widmar said.
There are things the company could do, like importing semi-finished modules to complete in the US, but as Trump’s tariff policy keeps changing, Widmar said his only option is to sit and wait.
“There’s a lot of strategies that we could do once we understand the policy environment and the tariff environment that we’re going to be in,” he said. “But I don’t know any of that right now.”
Widmar said that trade data for this year suggests Chinese manufacturers are importing through low-tariff countries like Laos and Indonesia. “We have no doubt that these Chinese manufacturers are also seeking to establish production in other regions around the world, such as Saudi Arabia, forcing us into a continued game of whack-a-mole,” Widmar said.
