For third-quarter 2013, First Solar Inc of Tempe, AZ, USA – which makes thin-film photovoltaic modules based on cadmium telluride (CdTe) as well as providing engineering, procurement & construction (EPC) services – has reported net sales of $1.27bn, up $746m (143%) on $520m last quarter and up $427m (51%) on $839m a year ago.
Fiscal Q3/2012 Q4/2012 Q1/2013 Q2/2013 Q3/2013 Revenue $839m $1075m $755m $520m $1266m
This is despite the amount of panels produced falling (due to closure of the firm's German plant) from 489.8MW a year ago to 426MW (albeit up 10% on 388.9MW last quarter, and up 8% on a year ago excluding the Germany production).
The rise in revenue is due mainly to higher systems business project revenue - including initial revenue recognition for the Desert Sunlight project and the sale of the ABW (Anherstburg, Belmont and Walpole) projects in Ontario, Canada - as well as higher sales volume to third-party module-only customers.
Compared to $88m ($1.00 per fully diluted share) a year ago and $33.6m ($0.37 per fully diluted share) last quarter, net income was $195m ($1.94 per fully diluted share). This was impacted by pre-tax asset impairment charges of $56.6m related to the recently announced agreement to sell the firm's facility in Mesa, AZ, which is expected to provide additional liquidity in the form of cash sale proceeds (net of costs to sell) of about $115m, and is expected to result in a net reduction in annual operating expenses (including both depreciation expense and cash expenditures) of about $10m. The firm expects net cash proceeds to be received in Q4/2013.
Excluding the impact of the asset impairment charge, non-GAAP net income rose to $229.3m ($2.28 per fully diluted share). This was up on $11.5m ($1.27 per fully diluted share) a year ago and $35.3m ($0.39 per fully diluted share) last quarter, due mainly to the initial revenue recognition of Desert Sunlight, the sale of the ABW projects, and higher sales volumes to third-party module-only customers. The year-on-year increase due mainly to higher systems business project revenue, higher manufacturing utilization and higher module sales to third-party customers.
Cash flow from operations was $375.1m, up from $222.4m last quarter and just $22.3m a year ago. Capital expenditure was $69.5m, down from $85.2m last quarter but up from $57.2m a year ago. Overall, free cash flow was $283.9m, compared with $167.9m last quarter and cash burn of $40.4m a year ago. During the quarter, cash and marketable securities hence rose by $247m to $1.5bn. Net cash grew by $274m to $1.3bn.
"The third quarter marks a key milestone in our company's progress in achieving the strategic objectives we outlined during our Analyst Day event in April," says CEO Jim Hughes. "During the quarter we delivered on several key objectives, including additional bookings of 860MWDC, significant reductions to our module manufacturing cost [from $0.67 per Watt last quarter to $0.59 per Watt – the biggest reduction for six years - aided by a rise in average conversion efficiency from 12.7% a year ago and 13.0% last quarter to 13.3%], and strong financial performance," he adds.
For full-year 2013, First Solar has updated its guidance as follows: net sales lowered from $3.6-3.8bn to $3.4-3.6bn; gross margin raised from 22-23% to 24-26%; operating income raised from $405-435m to $470-490m; earnings per share raised from $3.75-4.25 to $4.25-4.50; operating cash flow lowered from $0.8-1.0bn to $0.7-0.9bn; and capital expenditure lowered from $350-400m to $300-350m. Guidance is unchanged for operating expenses of $390-410m.
This guidance assumes full-year shipments of 1.2GWDC (systems) and 400-500MWDC (module-only); production of 1.6-1.7GWDC; module manufacturing cost of $0.61/W (average) and $0.58/W (exiting 2013); module efficiency of 13.1% (average) and 14.0% (lead-line exit); and about 50% of revenue recognized for the Desert Sunlight project.
