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Investors took a sunny view of First Solar after the company said the sale of the Moapa project in Nevada helped drive sales and return the company to profitability.

Shares in the Arizona-based company surged more than 8 per cent in extended trading after it lifted its outlook for full-year adjusted earnings to a range of 25 to 74 cents from its previous estimates to break even or post earnings of as much as 50 cents a share.

Moreover, the company said net sales rose 1.8 per cent to $891.8m in the first quarter, eclipsing Wall Street estimates of $693.1m. It was also up 59 per cent sequentially, driven primarily by the sale of the Moapa project that were partially offset by lower third-party module sales.

First Solar completed the sale of its 50-megawatt Moapa project in Nevada to private asset manager Capital Dynamics late in March. The solar power plant is capable of generating enough clean energy to power approximately 111,000 homes.

Profits fell to just $9.1m, or 9 cents a share, in the three months ended in March, compared with $195.6m, or $1.90 a share, in the year-ago period. That compared to analysts’ estimates of a loss of 33 cents. During the previous quarter, it lost $7.22 a share. The first quarter was impacted by pre-tax restructuring and asset impairment charges of $20m.

As competition in the solar business heats up, module prices have softened and weighed on the industry. Moreover, Donald Trump’s win in the presidential election also prompted sentiment on solar panel makers to sour as investors anticipated a softer stance on coal mining.

But a US International Trade Commission petition from Atlanta-based Suniva seeking to impose temporary tariffs on solar cells and a floor price for solar modules imported into America has helped lift shares of the companies recently.

Copyright The Financial Times Limited 2017. All rights reserved.
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