3 May 2011

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

For first-quarter 2011, 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 revenue of $567.3m, down slightly on $568m a year ago (due to lower average selling prices) but down 7% on $610m last quarter, due to: (i) the allocation of modules to systems projects in order to meet the project contractual delivery schedule; (ii) seven fewer production days; and (iii) a full quarter impact of the pricing change implemented in December.

Net income was $116m ($1.33 per diluted share), down from $156m ($1.80 per diluted share) last quarter (driven mainly by lower net sales and gross margin) and $172.3m ($2.00 per diluted share) a year ago (driven mainly by reduced average selling prices and higher expenses, partially offset by increased module production and lower module cost per watt).

“Despite European market uncertainties, First Solar has good visibility into our demand for 2011,” says CEO Rob Gillette. “We continue to execute our cost roadmaps, invest in new module capacity, build our project pipeline, and develop promising new markets around the world.”

In late February, First Solar reduced the top end of its guidance for net sales in 2011 from the $3.7–3.9bn forecast of mid-December to $3.7–3.8bn (up 46% on 2010’s $2,564m). However, it increased its guidance for operating income from $875–975m to $910–980m, and for earnings per fully diluted share from $8.75–9.50 to $9.25–9.75 (including $60–70m of manufacturing start-up expenses and $15–20m of factory ramp costs).

Now, while maintaining its late February revenue guidance, the firm has cut back its guidance for operating income to $900–970m. Also, while maintaining its earnings guidance, it expects lower manufacturing start-up expenses of $50–60m and lower factory ramp costs of $10–15m. First Solar is maintaining its original mid-December forecast for total capital spending of $1–1.1bn, but has cut its guidance for operating cash flow from $1.0–1.1bn to $0.8–1bn.

See related items:

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

First Solar’s sales rise 36% in Q3 to $798m

First Solar revenue grows just 3.5% to $587.9m in Q2

Cd PV maker First Solar’s profit rises in Q1 despite 11% dip in sales

Tags: First Solar Thin-film photovoltaic CdTe

Visit: www.firstsolar.com