The company, long the darling of the solar industry, has suffered with the dramatic drop in the price of solar panels that has nearly erased profit margins in the sector.
First Solar said it now expects net sales of $2.8 billion to $2.9 billion in 2011, down from its October forecast of $3 billion to $3.3 billion.
It sees earnings per share for 2011 at $5.75 to $6, compared with the previous forecast of $6.50 to $7.50 per share.
The new forecast does not include expected charges the company plans to record to accelerate cost reductions and improve efficiency, it said. Those charges include about 10 cents per share related to layoffs of about 100 employees, about 1.5 percent of its total workforce.
In Germany, shares in its smaller rival Solon
In October, First Solar ousted CEO Robert Gillette after two years as the company struggled to cope with a glut of solar equipment on the global market that has pushed average prices for panels down by about 40 percent so far this year.
The Tempe, Ariz.-based company is the lowest cost producer of solar modules in the world, but the steep drop in the price of raw materials for its competitors has narrowed its price advantage this year.
First Solar's thin film modules use cadmium telluride rather than polysilicon to turn sunlight into electricity.
The market is likely to remain tough in 2012, with the company forecasting earnings per share of $3.75 to $4.25 on net sales of $3.7 to $4 billion.
Analysts had on average forecast the company would post earnings per share of $7.40 in 2012, though estimates varied widely between about $5 and $10 per share, according to Thomson Reuters I/B/E/S, on sales of $4.01 billion.
Shares in First Solar sunk 21 percent in trading to close at $33.45.