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First Solar books lower Q3 profits, cuts 2018 guidance


First Solar books lower Q3 profits, cuts 2018 guidance

October 30 (Solar) – US thin-film solar module maker First Solar Inc (NASDAQ:FSLR) last week posted a decrease in third-quarter revenues and net profit and revised downwards its outlook for 2018.

Citing lower-than-expected sales of photovoltaic (PV) modules, higher manufacturing costs and the shift of a certain project sale in Japan into 2019, the company lowered expectations for operating and net results, net sales and shipment volumes.

The table below shows First Solar’s previous and updated forecast for 2018.

2018 GAAP Guidance (in USD, unless otherwise noted) Old New
Net sales 2.5bn-2.6bn 2.3bn-2.4bn
Gross margin (%) 20.5-21.5 18.5-19.5
Operating expenses 390m-400m 345m-355m
Operating income 120m-160m 90m-110m
EPS 1.50-1.90 1.40-1.90
Net cash balance 2.2bn-2.4bn 2bn-2.2bn
Operating cash flow 100m-200m (100m)-0
Capital expenditures 800m-900m Unchanged
Shipments (GW) 2.8-2.9 2.6-2.7

First Solar’s CEO Mark Widmar said the company enjoys strong demand for its Series 6 products, having signed contracts for 1.1 GW of capacity since its previous earnings update in July. “This brings our total contracted volume to 11.3 GW DC and provides us with a strong competitive advantage as we move forward,” he added.

First Solar is making the Series 6 modules in Malaysia and Vietnam and earlier this year started building a 1.2-GW factory in Ohio, planned to become operational in late 2019.

The PV manufacturer closed the third quarter of 2018 with a net profit of USD 57.8 million (EUR 65.8m), down from USD 205.7 million a year before. Net sales contracted by 38% to USD 676.2 million but improved from USD 309.3 million in the second quarter due to ongoing construction activities at the 280-MW California Flats solar project, which was sold to Capital Dynamics last year, and the disposal of the 100-MW Willow Springs and 46.7-MW Manildra solar projects.

“We had good execution in the third quarter as we closed the sales of certain key projects and delivered solid financial results,” the CEO said.

More details about the Q3 performance can be seen in the table.

Figures in USD Q3 2018 Q3 2017
Net sales 676.2m 1.09bn
Operating profit 58.5m 207m
Net profit 57.8m 205.7m
Earnings per diluted share 0.54 1.95

Cash and marketable securities at the end of September totalled USD 2.7 billion, down from USD 3.1 billion at the end of the second quarter in July. The drop is a result of ongoing capital investments in Series 6 manufacturing capacity and cash receipts timing related to specific project sales.

(USD 1.0 = EUR 1.139)

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