7 May 2012

First Solar’s revenue falls 25% in Q1 to $497m

For first-quarter 2012, First Solar Inc of Tempe, AZ, USA, which manufactures thin-film photovoltaic modules based on cadmium telluride (CdTe) as well as providing engineering, procurement and construction (EPC) services, has reported net sales of $497m. This is down 25% on $660m last quarter (due mainly to lower volumes for module-only sales) and down 12% on $567.3m a year ago (due also to lower average selling prices, offset partially by higher systems revenue).

Compared with net income of $116m ($1.33 per fully diluted share) a year ago, net loss has worsened from $413.1m ($4.74 per fully diluted share) last quarter to $449.4m ($5.20 per fully diluted share). However, this was impacted by $5.12 per share by pre-tax charges consisting of (i) $401m (reducing earnings per share by $4.64) related to restructuring actions (including asset impairments) announced on 17 April, and (ii) $43m (reducing earnings per share by $0.48) related to costs in excess of normal warranty expense associated with a previously announced 2008 to 2009 manufacturing excursion (including about $31m in accruals reflecting the completion of processing for all remaining claims during Q1).

Hence, on a non-GAAP basis (excluding charges), net loss was $6.7m ($0.08 per fully diluted share). This compares with net income of $110m ($1.26 per fully diluted share) last quarter and $116m ($1.33 per diluted share) a year ago. During the quarter, cash and marketable securities fell from $788m to $750m.

“First Solar’s performance in the quarter was impacted by an aggressive competitive environment resulting from persistent supply-demand imbalances in the market, as well as restructuring costs that will improve our operating efficiency and help position us for the future,” says chairman Mike Ahearn. The restructuring involves the firm closing its manufacturing operations in Frankfurt (Oder), Germany and, from 1 May, idling indefinitely four production lines at its manufacturing center in Kulim, Malaysia.

Based on reductions in First Solar’s ongoing cost structure related to the restructuring initiatives, the firm is increasing its full-year 2012 guidance for earnings per fully diluted share from $3.75-4.25 to $4.00-4.50 (excluding restructuring and impairment charges, and costs in excess of normal warranty expense) and for operating cash flow from $800-900m to $850-950m. Net sales are still expected to be $3.5-3.8bn (up 30% on 2011’s $2.76bn).

“Looking forward, we are confident we have the right long-term strategy and the right platform to enable long-term growth and value creation,” says Ahearn. “We believe that by executing our strategic roadmaps and completing our restructuring program we can achieve our targets of 2.6-3.0GW of sales in sustainable markets, earning a return on invested capital of 13-17% by 2016.”

See related items:

First Solar to close German manufacturing facility and idle four lines in Malaysia

First Solar’s sales fall 34% in Q4/2011, limiting full-year growth to 8%

First Solar’s sales rise 89% in Q3 to $1bn

First Solar’s Q2 sales fall 6% to $533m

First Solar’s sales drop 7% in Q1; 2011 guidance cut

First Solar grows revenue 24% in 2010, despite drop off in Q4

Tags: First Solar Thin-film photovoltaic CdTe

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