I’ve been traveling in Panama, so have some earnings reports to catch up on.  First Solar (FSLR) reported after the bell on Tuesday and it wasn’t pretty.  The company missed badly on a non GAAP basis in addition to reporting a hefty one time loss which included $125 million for faulty panels produced a few years ago.  The company reported a non GAAP EPS of $1.26/share vs the analyst estimate  for $1.53 on revenue of just $660 million vs the analyst estimate for $779 million.  On the bright side though that $660 million rev number was still above the year ago quarter of $610 million.

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“First Solar’s performance in the quarter was impacted by an aggressive competitive environment, an uncertain regulatory environment, warranty-related charges, and restructuring costs incurred to help position our business for the future,” said Mike Ahearn, Chairman and interim Chief Executive Officer of First Solar. “Despite these headwinds, we continue to make strides reducing manufacturing costs, increasing module efficiency, and successfully building out our captive project pipeline. These improvements, combined with our recent restructuring and strategic repositioning, enhance our competitive position in a very challenging environment.”

To make matters worse, the company is cutting 2012 revenue guidance and now sees revenues between $3.5 – $3.8 billion vs the previous estimate of $3.7 – $4 billion.  On the bright side, EPS guidance remains intact at $3.75 – $4.25 per share.

Here are some additional notes on the quarter..

* company continues to move away from increasingly less profitable thin film solar panels and into solar plant production

* Germany proposed a measure that would significantly reduce or potentially phase out subsidies for solar panels.  Ahearn believes company’s success ultimately depends on targeting markets that don’t rely on subsidies.  I’d expect India to potentially be a significant market for them and other solar companies.

Technically, shares of FSLR are headed to and will retest multi year lows just below $30.  It’s too early to tell if that level will hold, but given the overbought conditions in the overall market, any significant correction could help push FSLR to another multi year low and beyond.  I wouldn’t touch it here.

Getting back to the question “Can it get any worse for First Solar?”..  it certainly could.  The key as mentioned by Ahearn will be those unsubsidized markets with India and Africa being  important wild cards.  Those markets are probably a couple years off from being big contributors though.  It’s looking like another tough year for solar in 2012.