First Solar, Inc. Announces Third Quarter 2018 Financial Results

October 25, 2018 at 4:02 PM EDT
  • Net sales of $676 million
  • Net income per share of $0.54
  • Cash and marketable securities of $2.7 billion, net cash of $2.3 billion
  • YTD net bookings of 5.2GWDC; 1.1GWDC booked since prior earnings call
  • Series 6 commercial shipments commenced from third factory location
  • Earnings guidance lowered primarily due to timing of systems project sale

TEMPE, Ariz., Oct. 25, 2018 (GLOBE NEWSWIRE) -- First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the third quarter of 2018. Net sales for the third quarter were $676 million, an increase of $367 million from the prior quarter primarily due to ongoing construction activities at the California Flats project and the sale of the Willow Springs and Manildra projects.

The Company reported third quarter earnings per share of $0.54, compared to a loss per share of $(0.46) in the second quarter. Net income increased compared to the prior quarter primarily due to improved net sales, the mix of higher gross profit projects, and lower operating expenses.

Cash and marketable securities at the end of the third quarter decreased to $2.7 billion from $3.1 billion at the end of the second quarter. The decrease primarily resulted from ongoing capital investments in Series 6 manufacturing capacity, ongoing factory ramp activities and the timing of cash receipts from certain systems project sales.

“We had good execution in the third quarter as we closed the sales of certain key projects and delivered solid financial results,” said Mark Widmar, CEO of First Solar. “In addition, with the start of Series 6 production at our Vietnam factory we now have three locations manufacturing our most advanced product. Demand for Series 6 continues to be resilient as demonstrated by bookings of 1.1GWDC since our prior earnings call. This brings our total contracted volume to 11.3GWDC and provides us with a strong competitive advantage as we move forward.”

Guidance ranges for 2018 have been updated as a result of lower expected module sales, higher manufacturing ramp costs and the revised expectation that the Ishikawa project in Japan will now be sold in 2019.  The complete update to 2018 guidance is as follows:

2018 GAAP Guidance Prior Current
Net Sales $2.5B to $2.6B $2.3B to $2.4B
Gross Margin % (1) 20.5% to 21.5% 18.5% to 19.5%
Operating Expenses (2) $390M to $400M $345M to $355M
Operating Income $120M to $160M $90M to $110M
Earnings per Share $1.50 to $1.90 $1.40 to $1.60
Net Cash Balance (3) $2.2B to $2.4B $2.0B to $2.2B
Operating Cash Flow $100M to $200M $(100M) to $0M
Capital Expenditures $800M to $900M Unchanged
Shipments 2.8GW to 2.9GW 2.6GW to 2.7GW
     

____________________

  1. Includes approximately $100 million of ramp costs
  2. Includes approximately $90 million of production start-up expense
  3. Defined as cash and marketable securities less expected debt at the end of 2018

First Solar has scheduled a conference call for today, October 25, 2018 at 4:30 p.m. ET to discuss this announcement. A live webcast of this conference call is available at investor.firstsolar.com. An audio replay of the conference call will also be available approximately two hours after the conclusion of the call. The audio replay will remain available until Thursday, November 1, 2018 at 7:30 p.m. ET and can be accessed by dialing 888-203-1112 if you are calling from within the United States or 719-457-0820 if you are calling from outside the United States and entering the replay pass code 2947631. A replay of the webcast will be available on the Investors section of the Company’s website approximately two hours after the conclusion of the call and will remain available for approximately 90 calendar days.

About First Solar, Inc.

First Solar is a leading global provider of comprehensive photovoltaic (“PV”) solar systems which use its advanced module and system technology. The Company's integrated power plant solutions deliver an economically attractive alternative to fossil-fuel electricity generation today. From raw material sourcing through end-of-life module recycling, First Solar’s renewable energy systems protect and enhance the environment. For more information about First Solar, please visit www.firstsolar.com.

For First Solar Investors

This release contains forward-looking statements which are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements in this release, other than statements of historical fact, are forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning: our financial guidance for 2018; the transition to Series 6 module manufacturing in 2018; and our business and financial objectives for 2018. These forward-looking statements are often characterized by the use of words such as “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “seek,” “believe,” “forecast,” “foresee,” “likely,” “may,” “should,” “goal,” “target,” “might,” “will,” “could,” “predict,” “continue” and the negative or plural of these words and other comparable terminology. Forward-looking statements are only predictions based on our current expectations and our projections about future events and therefore speak only as of the date of this release. You should not place undue reliance on these forward-looking statements. We undertake no obligation to update any of these forward-looking statements for any reason, whether as a result of new information, future developments or otherwise. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include, but are not limited to: structural imbalances in global supply and demand for PV solar modules; the market for renewable energy, including solar energy; our competitive position and other key competitive factors; reduction, elimination, or expiration of government subsidies, policies, and support programs for solar energy projects; our ability to execute on our long-term strategic plans; our ability to execute on our solar module technology and cost reduction roadmaps; interest rate fluctuations and both our and our customers’ ability to secure financing; our ability to attract new customers and to develop and maintain existing customer and supplier relationships; our ability to successfully develop and complete our systems business projects; our ability to convert existing production facilities to support new product lines, such as Series 6 module manufacturing; general economic and business conditions, including those influenced by U.S., international, and geopolitical events; environmental responsibility, including with respect to cadmium telluride (“CdTe”) and other semiconductor materials; claims under our limited warranty obligations; changes in, or the failure to comply with, government regulations and environmental, health, and safety requirements; effects resulting from pending litigation; future collection and recycling costs for solar modules covered by our module collection and recycling program; our ability to protect our intellectual property; our ability to prevent and/or minimize the impact of cyber-attacks or other breaches of our information systems; our continued investment in research and development; the supply and price of components and raw materials, including CdTe; our ability to attract and retain key executive officers and associates; and the matters discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” of our most recent Annual Report on Form 10-K and our subsequently filed Quarterly Reports on Form 10-Q, as supplemented by our other filings with the Securities and Exchange Commission.

Contacts

First Solar Investors
Steve Haymore
602-414-9315
stephen.haymore@firstsolar.com

First Solar Media
Steve Krum
602-427-3359
steve.krum@firstsolar.com

FIRST SOLAR, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)

 

 
  September 30,
 2018
  December 31,
 2017
ASSETS        
Current assets:        
Cash and cash equivalents   $ 1,434,883     $ 2,268,534  
Marketable securities   1,295,049     720,379  
Accounts receivable trade, net   141,699     211,797  
Accounts receivable, unbilled and retainage   421,134     174,608  
Inventories   296,038     172,370  
Balance of systems parts   51,448     28,840  
Project assets   28,978     77,931  
Notes receivable, affiliate   21,308     20,411  
Prepaid expenses and other current assets   195,552     157,902  
Total current assets   3,886,089     3,832,772  
Property, plant and equipment, net   1,671,129     1,154,537  
PV solar power systems, net   310,493     417,108  
Project assets   463,624     424,786  
Deferred tax assets, net   108,636     51,417  
Restricted cash and investments   341,125     424,783  
Equity method investments   3,192     217,230  
Goodwill   14,462     14,462  
Intangibles assets, net   74,585     80,227  
Inventories   124,266     113,277  
Note receivable, affiliate       48,370  
Other assets   96,954     85,532  
Total assets   $ 7,094,555     $ 6,864,501  
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities:        
Accounts payable   $ 154,602     $ 120,220  
Income taxes payable   49,941     19,581  
Accrued expenses   433,117     366,827  
Current portion of long-term debt   2,618     13,075  
Deferred revenue   215,900     81,816  
Other current liabilities   12,006     48,757  
Total current liabilities   868,184     650,276  
Accrued solar module collection and recycling liability   133,965     166,609  
Long-term debt   463,485     380,465  
Other liabilities   457,964     568,454  
Total liabilities   1,923,598     1,765,804  
Commitments and contingencies        
Stockholders’ equity:        
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 104,814,322 and 104,468,460 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively   105     104  
Additional paid-in capital   2,816,585     2,799,107  
Accumulated earnings   2,389,438     2,297,227  
Accumulated other comprehensive (loss) income   (35,171 )   2,259  
Total stockholders’ equity   5,170,957     5,098,697  
Total liabilities and stockholders’ equity   $ 7,094,555     $ 6,864,501  
                 

FIRST SOLAR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

    Three Months Ended   Nine Months Ended
    September 30,
 2018
  June 30,
 2018
  September 30,
 2017
  September 30,
 2018
  September 30,
 2017
Net sales   $ 676,220     $ 309,318     $ 1,087,026     $ 1,552,803     $ 2,602,143  
Cost of sales   547,093     317,376     795,226     1,258,936     2,115,266  
Gross profit (loss)   129,127     (8,058 )   291,800     293,867     486,877  
Operating expenses:                    
Selling, general and administrative   33,539     50,854     50,546     125,519     147,702  
Research and development   22,390     20,370     20,850     63,084     64,990  
Production start-up   14,723     24,352     12,624     76,159     22,155  
Restructuring and asset impairments           791         39,108  
Total operating expenses   70,652     95,576     84,811     264,762     273,955  
Operating income (loss)   58,475     (103,634 )   206,989     29,105     212,922  
Foreign currency (loss) gain, net   (2,383 )   2,422     (3,968 )   (2,478 )   (6,166 )
Interest income   16,456     16,865     8,392     45,145     22,364  
Interest expense, net   (3,198 )   (6,065 )   (4,149 )   (14,445 )   (19,692 )
Other (loss) income, net   (5,971 )   (4,328 )   2,018     7,635     25,180  
Income (loss) before taxes and equity in earnings   63,379     (94,740 )   209,282     64,962     234,608  
Income tax (expense) benefit   (2,396 )   6,164     (7,580 )   (7,857 )   26,769  
Equity in earnings, net of tax   (3,233 )   40,085     4,045     35,105     5,462  
Net income (loss)   $ 57,750     $ (48,491 )   $ 205,747     $ 92,210     $ 266,839  
                     
Net income (loss) per share:                    
Basic   $ 0.55     $ (0.46 )   $ 1.97     $ 0.88     $ 2.56  
Diluted   $ 0.54     $ (0.46 )   $ 1.95     $ 0.87     $ 2.54  
Weighted-average number of shares used in per share calculations:                    
Basic   104,804     104,776     104,432     104,711     104,287  
Diluted   106,163     104,776     105,660     106,211     104,889  
                               

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Source: First Solar, Inc.