For third-quarter 2014, 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 $889m, down 30% on $1266m a year ago but up 63% on $544m last quarter due mainly to increased revenue recognition on the Desert Sunlight project.
Fiscal Q3/2013 Q4/2013 Q1/2014 Q2/2014 Q3/2014 Revenue $1266m $768m $950m $544m $889m
Compared with $156m a year ago (which included $57.3m of restructuring and asset impairments), operating expenses have risen from $90.8m last quarter to $105.5m. In particular, R&D expenses have risen from $32.6m to $37.6m and selling, general & administrative (SG&A) expenses have risen from $57.7m to $66.5m, supplemented by production start-up costs of $1.4m in Q3.
Although down from $195m ($1.94 per fully diluted share) a year ago, GAAP net income has rebounded from just $4.5m ($0.04 per fully diluted share) last quarter to $88.4m ($0.87 per fully diluted share) due to higher profit from the Desert Sunlight project and other systems projects under construction as well as a one-time income tax benefit of $0.26 per fully diluted share.
Cash flow used in operations during the quarter was $47m. Due to the construction of multiple utility-scale power plants that have not yet been sold, cash and marketable securities fell by $234m from about $1.3bn to $1.1bn. First Solar continues to construct these projects while determining the optimal sales strategy for them. Net cash has fallen from $1.2bn to $0.9bn.
“Following the project delays experienced in the prior quarter, our third quarter earnings have improved, and we continue to make progress towards our financial targets for the year,” says CEO Jim Hughes. “Our year-to-date book-to-bill ratio is well above our objective of a one-to-one ratio, and we are on track to meet or exceed our bookings goal for the year.” In Q3, new bookings were 521MWdc, bringing year-to-date bookings to 1.7GWdc.
First Solar maintains its full-year 2014 guidance for earnings per share of $2.40-2.80 (excluding the impact of the $0.26 per share one-time tax benefit in Q3) and operating cash flow of $300-500m. Otherwise, First Solar has revised its guidance for net sales from $3.7-4bn to $3.6-3.9bn, for gross margin from 18-19% to 19-20%, for operating expenses from $380-395m to $390-400m, for operating income from $290-340m to $300-340m, and for capital expenditure from $300-350m to $250-300m. The production target of 1.8-1.9GW is unchanged.
