2013 Q3 Financial Results for First Solar Inc

first solar inc

first solar inc


First Solar Inc. (Nasdaq: FSLR) has announced financial results for the third quarter of 2013. Net sales were $1.3 billion in the quarter, an increase of $746 million from the prior quarter and an increase of $427 million from the third quarter of 2012. The sequential increase in net sales is primarily attributable to higher systems business project revenues, which included initial revenue recognition of Desert Sunlight and the sale of the ABW projects in Canada. Compared to the third quarter of 2012, the increase in net sales was also attributable to the Desert Sunlight and ABW projects and higher sales volume to third-party module-only customers in the third quarter of 2013, partially offset by initial revenue recognition for Topaz, achieved in the third quarter of 2012.

Revenues for the first nine months of 2013 were $2.5 billion compared to $2.3 billion for the first nine months of 2012.


The Company reported third quarter net income per fully diluted share of $1.94, compared to $0.37 in the second quarter of 2013 and $1.00 in the third quarter of 2012. The third quarter of 2013 was impacted by pre-tax asset impairment charges of $56.6 million related to the recently announced agreement to sell the Company’s facility in Mesa, Arizona. The sale of the facility is expected to provide additional liquidity to the Company in the form of cash sale proceeds, net of costs to sell, of approximately $115 million, and is expected to result in a net reduction in annual operating expenses (including both depreciation expense and cash expenditures) of approximately $10 million. The Company expects the Net cash proceeds from the sale to be received in the fourth quarter of this year. Excluding the impact of the asset impairment charge, Non-GAAP net income per fully diluted share was $2.28. The sequential increase in Non-GAAP earnings is primarily attributable to the initial revenue recognition of Desert Sunlight, the sale of the ABW projects, and higher sales volumes to third-party module-only customers in the third quarter compared to the second quarter. The year over year increase in earnings was primarily due to higher systems business project revenue, higher manufacturing utilization and higher module sales to third-party customers in the third quarter of 2013 compared to the third quarter of 2012.

Cash and Marketable Securities at the end of the third quarter were approximately $1.5 billion, an increase of approximately $247 million compared to the end of the second quarter of 2013. The Company’s Net Cash grew to approximately $1.3 billion, an increase of approximately $274 million from the second quarter of 2013. Cash flows from operations were $375 million in the third quarter, compared to $222 million for the second quarter of 2013.

The Company also posted its Earnings Call Presentation, which included updated guidance for 2013 on the Company’s website at http://investor.firstsolar.com.

The updated guidance is as follows:

2013 Guidance Update

Current                                                                                Prior

Net Sales $3.4B to $3.6B                                          $3.6B to $3.8B

Gross Margin (%) 24% to 26%                                  22% to 23%

Operating Expenses No Change                              $390M to $410M

Operating Income $470M to $490M                  $405M to $435M

Effective Tax Rate 14% to 16%                                  15% to 17%

Earnings Per Share* $4.25 to $4.50                     $3.75 to $4.25

Operating Cash Flow $0.7B to $0.9B                   $0.8B to $1.0B

Capital Expenditures $300M to $350M             $350M to $400M

Working Capital** $50M to $150M                      $50M to $200M

* Includes per-share impact of Equity Offering and GE Shares

** Expected decrease in working capital from Dec. 31, 2012

“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,” said Jim Hughes, CEO of First Solar. “During the quarter we delivered on several key objectives, including additional bookings of 860MWdc, significant reductions to our module manufacturing cost, and strong financial performance. With these encouraging results achieved, we move forward, focusing on strengthening our leadership position in the marketplace and achieving our strategic objectives for future success.”

For a reconciliation of non-GAAP measures to measures presented in accordance with generally accepted accounting principles in the U.S. (“GAAP”), see the tables below.

First Solar has scheduled a conference call for today, October 31, 2013 at 4:30 p.m. ET to discuss this announcement. Investors may access a live webcast of this conference call by visiting http://investor.firstsolar.com/events.cfm.

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 Wednesday, November 6, 2013 at 11:59 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 6970466. A replay of the webcast will be available on the Investors section of the Company’s web site approximately two hours after the conclusion of the call and remain available for approximately 90 calendar days.

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