First Solar, Inc. ( FSLR ) has entered
into an acquisition agreement with JX Nippon Oil & Energy
Corporation. Per the deal, First Solar plans to purchase TetraSun
from JX Nippon for an undisclosed amount. We note that JX Nippon is
the largest oil company in Japan.CANADIAN SOLAR (CSIQ): Free Stock Analysis
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TetraSun has significant expertise in silicon photovoltaic (PV)
technology and has achieved world records for silicon cell
efficiencies at companies like SunPower Corp. ( SPWR ).
Post-acquisition, First Solar will thus be able to leverage this
impressive solar team. Moreover, per the agreement, both the
parties intend to produce and market TetraSun products in Japan.
The acquisition is expected to be completed in the second quarter
TetraSun is the developer of high-efficiency solar panels. It has
developed a break-through cell architecture that has the potential
to convert 21% sunlight into electricity at lower manufacturing
costs in comparison to conventional multi crystalline silicon solar
cells. Besides, being simple, the design is cost-effective as it
uses the large-format 156 mm n-type wafers. This automatically
removes the need to use expensive silver and transparent conductive
TetraSun's technology benefits from a low temperature coefficient
of power that allows production of superior energy yields in
extremely hot weather as compared to typical silicon PV modules.
Also, when compared to other high-efficiency crystalline silicon
cells, the new designed cell has wider tolerance power.
First Solar makes cadmium telluride glass substrate-based thin
film PV panels. However, the TetraSun technology uses silicon that
is used by most of the PV solar manufacturers, which mainly include
Chinese producers. This will open up fresh opportunity for First
Solar in the PV market that is forever keen on high-efficiency
technology. In fact, First Solar plans to begin commercial-scale
manufacturing using the new technology in the second half of
Moreover, the transaction will allow First Solar to expand its
footprint in Japan which is expected to become the second-largest
market for solar products in 2013 after China. For the Japanese
market, First Solar expects to open a factory that will produce
about 25 megawatts to 50 megawatts of TetraSun panels in
Meanwhile, First Solar has provided a financial update through
2015 on its Analyst Day in N.Y. It expects total module
shipments in the range of 1.6 gigawatt (GW) to 1.8GW in 2013, 1.8GW
to 2.2GW in 2014 and 2.3GW to 2.7GW in 2015.
Net sales for this year are expected in the range of $3.8 billion
to $4.0 billion. For 2014 and 2015, First Solar expects nets sales
in the range of $3.5 billion to $4.0 billion and $4.2 billion to
$4.8 billion, respectively.
Excluding restructuring expense of $10 million, the company
expects pro forma earnings per share in the range of $4.00 to $4.50
in 2013. For 2014, the company expects earnings in the range of
$2.50 to $4.00 per share, while for 2015 the guidance climbs to
$4.00 to 6.00 per share.
For full-year 2013, the company allocates $350 million to $400
million on capital expenditure. The company stated that the
guidance for this year and the next takes into account the revenue
recognition from Desert Sunlight which is scheduled to begin
operations in the second half of 2013.
The company presently retains a short-term Zacks Rank #3 (Hold).
Other stocks worth considering are Canadian Solar
Inc. ( CSIQ ) and
ReneSola Ltd. ( SOL ), both with a
Zacks Rank #2 (Buy).