First Solar Inc. FSLR reported adjusted first-quarter 2015 loss of 62 cents a share, much wider than the Zacks Consensus Estimate of a loss of 29 cents. In the prior-year quarter, FirstSolar had generated earnings of $1.89 per share. The downslide is attributed to a plunge in revenues.
The largest solar-panel manufacturer of the nation reported its first quarterly loss in years as it planned to form a YieldCo with fellow solar company, SunPower Corp. SPWR. Moreover, delays in multiple projects under construction, a higher proportion of modules and the sale of the SolarGen 2 project in the prior quarter led to disappointing results.
Revenue
First Solar’s revenues for the quarter decreased 50.6% year over year to $469.2 million. With this, the top line failed to meet the Zacks Consensus Estimate of $636 million.
Revenues were mainly affected by a delay in selling a share of its Los Hills-Blackwell project to Southern Co. SO, which was expected in the first quarter. It is scheduled to be recorded in the second quarter. Additionally, permitting delays on various projects along with a port strike on the West Coast affected the top line.
The company exited the quarter with 593 megawatt (“MW”) Dc of bookings, bringing the year-to-date figure to 905 MW.
Operational Highlights
Gross profit in the reported quarter was $39 million, down significantly from $236.7 million a year ago.
Total operating expenses rose 12% to $109.1 million from the year-ago level, largely due to higher selling, general, and administrative expenses along with an additional start-up cost of $6.7 million.
Operating loss was $70.1 million as against an operating income of $$139.3 million a year ago.
Financial Performance
First Solar had $779.9 million of cash and cash equivalents as of Mar 31, 2015, down from $1,482.1 million at year-end 2014. Long-term debt was $200.4 million at the end of the first quarter 2015 compared with $165 million as of Dec 31, 2014.
Forming a YieldCo
In Feb 2015, First Solar announced a partnership with SunPower to form a YieldCo. A YieldCo is a publicly traded subsidiary that essentially makes it easier for renewable energy companies to raise funds for new projects.
The YieldCo is expected to own 432 MW of projects, comprising stakes in eight solar farms. It also includes about 39 MW of rooftop solar arrays on 5,900 customer homes.
Second-Quarter 2015 Guidance
For the second quarter, the company expects earnings of 45 cents to 55 cents a share on revenues of $750 million to $850 million. Cash used in operating activities is expected in the range of $250−$350 million.
At the Peer
SunPower Corp. reported first-quarter 2015 adjusted earnings per share of 5 cents, missing the Zacks Consensus Estimate of 9 cents.
Upcoming Release
Canadian Solar Inc. CSIQ is scheduled to release first-quarter results on May 7.
Our Take
Tempe, AZ-based First Solar is steadily expanding its global footprint. The company primarily caters to the North American market but is also keen on grabbing a larger market share. Like other solar majors, Canadian Solar and SunPower, the company is looking to expand its operations in the Middle East, India, Japan, Australia and South America. Expansion into other geographies would lead to both top line and margin growth.
In the competitive solar landscape, the company’s efforts to stay ahead of technology are also encouraging. The deal recently signed with Apple Inc. (AAPL) is a major endorsement of the company. In a huge $848 million transaction, Apple has committed to buy clean energy from FirstSolar’s California Flats Solar Project.
The company is also focused on its distributed generation strategy that aims to strengthen its position in the residential solar markets.
First Solar presently has a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment