First Solar Inc.
) fell below the Zacks Consensus earnings per share (EPS) estimate
of 48 cents by 56 cents to digest an adjusted loss of 8 cents in
the first quarter of fiscal 2012. It also came in below the
year-ago quarterly EPS of $1.33.
On a reported basis, loss came in at $5.20 per share in the
reported quarter versus earnings of $1.33 per share in the year-ago
quarter. The sharp variance in the reported quarter was due to
charge related to restructuring activities announced in April and
charges related to costs in excess of normal warranty expense.
Earlier, in April, First Solar forced by lower demand closed its
manufacturing plant in Germany and idled four lines at its plant in
Malaysia. The restructuring would reduce the solar panel maker's
workforce head count by about 2,000, or about 30%.
First Solar's quarterly revenues were $497.1 million, down $70.2
million from $567.3 million in the year-ago quarter. Quarterly
revenue also fell behind the Zacks Consensus Estimate of $676
million. Also compared to the fourth quarter of 2011, revenue
decreased $163 million, primarily due to lower module volume sales
and lower average selling prices. This was partially offset by
higher systems revenue.
Gross margin in the reported quarter was 15.4%, down 5.5
percentage points from the prior quarter. Excluding non-recurring
charges in the fourth quarter of 2011 and those in the first
quarter of 2012, on a comparable basis, gross margin was 40.9% and
20.9%, respectively. The gross margin decline was reflective of
lower sales volume, lower average selling prices (ASPs), inventory
write-downs and the Systems business project sales mix.
Operating expenses were down $90.4 million quarter-over-quarter
to $533 million. Operating expenses in the fourth quarter of 2011
were impacted by a series of non-recurring charges, including
goodwill impairment, manufacturing excursion-related charges and
restructuring charges. Similarly, operating expenses in the first
quarter of 2012 were impacted by restructuring and manufacturing
excursion-related charges. Excluding these charges in the fourth
quarter 2011 and those in the first quarter of 2012, on a
comparable basis, operating expenses were $138 million and $116
million, respectively, or 16% lower in the first quarter of
Overall, First Solar reported a net loss was $449.4 million,
compared with a net income of $116.0 million in the same quarter
First Solar reported $610.5 million of cash and cash equivalents
at the end of the reported period versus $605.6 million at year-end
2011. Long-term debt increased to $806.1 million from $619.1
million at year-end 2011.
Based in Phoenix, Arizona, First Solar designs, manufactures and
sells solar electric power modules using a proprietary thin film
semiconductor technology. The company's solar modules employ a thin
layer of cadmium telluride semiconductor material to convert
sunlight into electricity.
First Solar is the only stand-alone solar player in the S&P
500 Index. Along with its solar peers, the company is witnessing an
oversupply of photovoltaic products leading to a steep drop in
ASPs. However, based on reductions in the company's ongoing cost
structure related to its restructuring initiatives, First Solar
raised its 2012 adjusted earnings guidance range to $4.00-$4.50 per
share from its prior guidance range of $3.75-$4.25 per share.
We are currently neutral on the Zacks #3 Rank (short-term Hold
rating) stock. In the near term we would advise investors to focus
on the Zacks #2 Rank (short-term Buy rating) peer
Ascent Solar Technologies Inc. (
ASCENT SOLAR TE (ASTI): Free Stock Analysis
FIRST SOLAR INC (FSLR): Free Stock Analysis
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