First Solar stock price drops after investors react to executive's tariff comments

Core Viewpoint - First Solar's stock declined over 7.5% following CEO Mark Widmar's comments on the significant challenges posed by President Trump's tariffs on the solar module manufacturer [1][5]. Group 1: Tariff Impact - The tariffs introduced by the Trump administration have created "significant challenges" for First Solar, particularly affecting its manufacturing facilities in India, Malaysia, and Vietnam [3][5]. - The initial 10% levy on imports and subsequent 90-day pause on reciprocal tariffs have partially mitigated impacts, but the lower rate still poses a meaningful adverse gross margin impact on sales to the U.S. market [5][6]. - There is uncertainty regarding future tariff rates after the 90-day pause, complicating the company's ability to quantify the impact on module shipments for the second half of the year [6]. Group 2: Production and Market Strategy - First Solar is considering reducing or idling production at its Malaysian and Vietnamese facilities due to potentially decreased U.S. demand for non-domestic products [7]. - The company plans to shift focus from exports to the U.S. from its Indian manufacturing site towards the domestic market in India [6]. - Despite current challenges, First Solar maintains a strong long-term outlook for solar demand in the U.S. market and believes it is well-positioned to capitalize on this demand [7][8]. Group 3: Financial Performance and Guidance - In its first-quarter earnings release, First Solar projected net sales for 2025 to be between $4.5 billion and $5.5 billion, a decrease from previous guidance of $5.3 billion to $5.8 billion [9]. - The company also revised its annual earnings per diluted share forecast to a range of $12.50 to $17.50, down from $17.00 to $20.00 [9][11]. - First Solar reported nearly $844.6 million in net sales and a net income of $209.5 million for the first three months of 2025 [11].