UPDATE 2-First Solar beats forecasts, shares soar

(Adds analysts comment, company forecast, share movement)

NEW YORK, Feb 13 (Reuters) - First Solar Inc (FSLR.O), maker of thin-film solar equipment, posted better-than-expected profit on Wednesday and raised its 2008 sales forecast, sending its shares soaring more than 20 percent.

The company, which is rapidly expanding its production capacity, had been hit by the broad sell-off in alternative energy stocks this year, but Wednesday's news was likely bring investors back.

"They continue to execute flawlessly," said Adam Hinckley, analyst with Oppenheimer & Co. "This is the sort of result that could revitalize the sector."

Fourth-quarter earnings jumped nearly eight times to $62.9 million, or 77 cents per share, from $8 million, or 12 cents per share, a year earlier.

That easily beat analysts' consensus forecast for earnings of 54 cents per share, according to Reuters Estimates.

Chief Financial Officer Jens Meyerhoff told a conference call the company expected 2008 sales to total between 400 to 430 megawatts of solar modules, up from the previous range of 370 to 390 megawatts.

The company also raised its revenue forecast for the year by about 15 percent to $900 million to $950 million.

Net sales in the fourth quarter rose to $201 million from $53 million a year earlier. Analysts had been looking for about $180.2 million.

The Phoenix-based company said it decreased its manufacturing cost per watt by 12 percent from the year-ago quarter to $1.12 per watt.

First Solar, which uses cadmium telluride rather than silicon to turn sunlight into electricity inside its modules, was one of the hottest solar stocks in 2007, when its shares surged more than eight-fold.

But the downturn in the U.S. stock markets and investor fears about the high valuations of solar stocks knocked the sector down sharply in the early part of 2008, and sliced more than a third off First Solar's stock price through Tuesday.

That stock surged back Wednesday morning, rallying more than 23 percent to an early high at $216.61 per share. (Reporting by Matt Daily, editing by Gerald E. McCormick and Dave Zimmerman)