First Solar Inc.
(
FSLR
) comfortably beat the Zacks Consensus earnings per share (EPS)
estimate of $1.75 by 29 cents to clock adjusted earnings of $2.04
in the fourth quarter of 2012. It also surpassed the year-ago
quarterly EPS of $1.26.
On a reported basis EPS came in at $1.74 per share in the fourth
quarter of 2012 versus a loss of $4.78 per share in the year-ago
quarter.
Full year 2012 adjusted EPS came in at $4.90, above the Zacks
Consensus Estimate of $4.59 but behind the full year 2011
earnings of $5.54. On a reported basis, loss came in at $1.11 in
2012 versus 46 cents loss in 2011.
Operational Performance
First Solar's quarterly revenues were $1.08 billion, up from
$660.35 million in the fourth quarter of 2011. The increase in
net sales was primarily due to increased revenue recognition for
the Topaz project, and an increase in third-party module sales.
Quarterly revenue, however, fell behind the Zacks Consensus
Estimate of $1.32 billion.
Full year 2012 revenue rose to $3.37 billion from $2.77 billion
year over year. However, this came in below the Zacks Consensus
Estimate of $3.62 billion.
In recent times, First Solar has been struggling as solar panel
prices continue to decline due to oversupply and weak demand.
Meanwhile, the company has turned its focus on building solar
farms on its own rather than selling solar panels to other
companies.
Gross margin in the fourth quarter was 27.3%, down from 28.4% in
the prior quarter. The gross margin decline is primarily
reflective of a less favorable mix of projects margins. The
write-down of certain refurbished module inventory during the
reported quarter was also a factor. The total margin decrease was
partially offset by a credit related to lower estimated future
collection and recycling cost.
Overall, First Solar reported that its fourth quarter of 2012 net
income was $154.18 million, compared with a net loss of $413.11
million in the same quarter last year.
Financial Performance
First Solar reported $901.29 million of cash and cash equivalents
at the end of 2012, up from $605.62 million at year-end 2011.
Long-term debt increased to $500.22 million from $619.14 million
at year-end 2011.
Guidance
Looking forward to the first quarter of 2013, the company
forecast net sales of $650 to $750 million and earnings of $0.70
to $0.90 per share.
Outlook
Based in Phoenix, Ariz., 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. First Solar Holdings currently has a Zacks Rank #3 (Hold).
Also, the current macro scenario does not bode well for the solar
industry, which thrives mainly on subsidies and grants. As a
result, solar operators like
Canadian Solar Inc.
(
CSIQ
),
JinkoSolar Holding Co., Ltd.
(
JKS
), and
SolarCity Corporation
(
SCTY
), we fear would face bleak fortunes in the near term.
CANADIAN SOLAR (CSIQ): Free Stock Analysis
Report
FIRST SOLAR INC (FSLR): Free Stock Analysis
Report
JINKOSOLAR HLDG (JKS): Free Stock Analysis
Report
SOLARCITY CORP (SCTY): Free Stock Analysis
Report
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