2 August 2012

First Solar sales almost double to $957m in Q2 as projects reach revenue recognition

For second-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 $957m, up 92% on $497m last quarter and 80% on $532.8m a year ago. Growth was due mainly to an increase in the number and size of projects under construction meeting revenue recognition criteria during the quarter, including Antelope Valley Solar Ranch 1 in California and Silver State North in Nevada.

“Despite market uncertainties, First Solar delivered strong performance in the quarter,” comments CEO Jim Hughes. Compared with net income of $61.1m ($0.70 per fully diluted share) a year ago and a net loss of $449.4m ($5.20 per fully diluted share) last quarter, First Solar has returned to net income of $111m ($1.27 per fully diluted share).

However, this was impacted by pre-tax charges of $36m ($0.39 per fully diluted share) consisting of (i) $23.7m (reducing earnings per share by $0.25) related to $19m of expenses for the restructuring announced on 17 April plus $4.7m of costs associated with the repayment of debt for the German manufacturing center; and (ii) $12.5m (reducing earnings per share by $0.14) related to costs in excess of normal warranty expense associated with remediation of a manufacturing excursion between June 2008 and June 2009. Excluding these charges, non-GAAP net income was $144.9m ($1.65 per fully diluted share). During the quarter, cash and marketable securities fell from $750m to $744m.

Based on reductions in its ongoing cost structure related primarily to restructuring initiatives, First Solar is increasing its 2012 guidance for sales from $3.5-3.8bn to $3.6-3.9bn, and for earnings per fully diluted share from $4.00-4.50 to $4.20-4.70 (excluding restructuring and impairment charges, and costs in excess of normal warranty expense). This comes after in May raising guidance from $3.75-4.25.

“We are confident we have the right long-term strategy and the right platform to enable long-term growth and value creation,” says Hughes. “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,” he believes.

See related items:

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

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

Tags: First Solar Thin-film photovoltaic CdTe

Visit: www.firstsolar.com