First Solar Inc (NASDAQ:FSLR) on Thursday reported a second-quarter (Q2) net loss and updated its 2018 guidance, narrowing the expected range of net sales.
The revised 2018 forecast also reflects a decrease in gross margin due to near-term increases in the cost per watt of its Series 6 products. Projections for earnings per share (EPS) remain unchanged due to lower operating costs and other items that offset the revised gross margin forecast.
The table below shows First Solar’s previous and new forecast for 2018.
| 2018 GAAP Guidance (in USD, unless otherwise noted) |
Old |
New |
| Net sales |
2.45bn-2.65bn |
2.5bn-2.6bn |
| Gross margin (%) |
21.5-22.5 |
20.5-21.5 |
| Operating expenses |
400m-410m |
390m-400m |
| Operating income |
130m-180m |
120m-160m |
| EPS |
1.50-1.90 |
Unchanged |
| Net cash balance |
2bn-2.2bn |
2.2bn-2.4bn |
| Operating cash flow |
0m-100m |
100m-200m |
| Capital expenditures |
850m-950m |
800m-900m |
| Shipments (GW) |
2.9-3.0 |
2.8-2.9 |
First Solar said it enjoys “solid” customer demand for its Series 6 products as contracts for almost 900 MW of capacity were signed since its previous earnings update in April. The company has launched first commercial shipments from its Malaysia manufacturing facility and last month broke ground on a 1.2-GW factory in Ohio, planned to become operational in late 2019. The Series 6 modules are also made in Vietnam.
“With two factories now producing Series 6 modules and a third factory on the cusp of starting production we have made significant progress during the past quarter, said CEO Mark Widmar. He went on to say that First Solar has year-to-date bookings of 4.1 GW in direct current (DC) and total contracted volume of 10.9 GW extending to end-2020, providing the company with “good visibility to future demand.”
The thin-film solar modules maker closed Q2 with a net loss of USD 48.5 million (EUR 41.6m), against a profit of USD 52 million a year before. Net sales marked a decrease to USD 309.3 million from USD 623.3 million in the second quarter of 2017 and from USD 567.3 million in January-March 2018 as a result of decreased system and third-party module sales and lower gross margins. The company also noted its system sales suffered from the timing of certain project sales.
More details about the Q2 performance can be seen in the table.
| Figures in USD |
Q2 2018 |
Q2 2017 |
| Net sales |
309.3m |
623.3m |
| Operating profit (loss) |
(103.6m) |
13.9m |
| Net profit (loss) |
(48.5m) |
52m |
| Earnings (loss) per diluted share - diluted |
(0.46) |
0.50 |
| Gross margin (%) |
(2.6) |
17.8 |
Cash and marketable securities at the end of June stood at USD 3.1 billion, an improvement from USD 2.9 billion at the end of the first quarter. The increase came mostly due to the cash from the sale of renewables yieldco 8point3 Energy Partners LP (NASDAQ:CAFD) to an equity fund managed by Capital Dynamics Inc in June but was partly offset by investments in Series 6 production capacity.
(USD 1.0 = EUR 0.858)
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First Solar PV plant. Source: First Solar Inc
