Despite First Solar’s (NasdaqGS: FSLR) healthy earnings beat, solar sector and related exchange traded funds plunged Wednesday, as momentum stocks falter on Fed Chair Yellen’s comments.
The Guggenheim Solar ETF (NYSEArca: TAN) fell 3.8% Wednesday while the Market Vectors Solar Energy ETF (NYSEArca: KWT) declined 4.3%. TAN is up 29.9% and KWT is 21.1% higher year-to-date. Despite the declines over the past month, TAN is still up 14.2% and KWT is 9.5% higher year-to-date.
First Solar revealed after market close Tuesday that first-quarter earnings almost doubled expected earnings per share estimates and beat the revenue estimate by over $100 million, reports Paul Ausick for 24/7 Wall St.
“We delivered strong earnings in the first quarter and are increasing our financial guidance for the year based on these results,” First Solar’s CEO said. “We have also made significant progress in new bookings and continue to execute on our technology roadmap.”
Nevertheless, First Solar shares plunged 7% Wednesday, following the broader sell-off in momentum stocks as Chair Janet Yellen spoke to Congress. First solar is the largest component holding in solar-related ETFs, accounting for 10% of TAN and 10.1% of KWT.
“A high degree of monetary accommodation remains warranted,” Yellen said, Bloomberg reports. “Many Americans who want a job are still unemployed,” and inflation is below the central bank’s 2 percent target.