First Solar has reported net sales of $544 million in the second quarter 2014, a decrease of $406 million from the first quarter of 2014.
The decline in sales is mainly attributed to the revenue recognition the company earned from their Campo Verde project in the prior quarter and the project delays in the second quarter, said Jim Hughes, CEO, First Solar, after announcing the results.
During the quarter, solar energy production increased by 1 percent to 447 MW DC over the previous quarter and 15 percent year over year. This is achieved through higher module efficiency and throughput improvements.
First Solar also achieved record cell efficiency of 21.0 percent, which improves upon the prior record of 20.4 percent announced earlier this year. This represents a milestone as CdTe cell efficiency now exceeds the world records for both multi-crystalline silicon and CIGS thin film technologies, the company said.
Average efficiency of First Solar modules was 14 percent in the second quarter which is up 50 basis points quarter-over-quarter and a 100 basis points higher year-over-year, according to First Solar.
As a percent of total sales, the company’s system revenue which includes both our EPC revenue and solar modules used in the systems project was 88 percent, a decrease of 8 percentage points from the prior quarter, reflecting the lower systems revenue an increase in third-party module sales.
Gross margin in the second quarter was 17 percent down from 24.9 percent in the prior quarter.
On a reported basis, second quarter operating income was $2 million compared to $139 million in Q1. The decrease was due to lower sales and gross margin partially offset by lower operating expenses.
Despite the negative results in Q2, the company remains on track to our financial targets for the year and reaffirm our full-year 2014 EPS and operating cash flow guidance, Hughes added.
First Solar intends to evolve the O&M business into a global third party provider of services. The recent acquisition of skytron energy is a major step in this direction.  It also more than doubles First Solar’s portfolio global portfolio of monitored assets and provides strategic positioning in the European O&M market which is expected to grow to 35 gigawatts by 2017.
During the quarter, First Solar signed EPC contracts for a 175 MW AC project in California. First Solar entered Indian market for the first time by signing a project of 45 MW AC.
To strengthen its presence in Asia, especially the booming Japan market, the company has signed supply agreement with XSOL, a leading distributor and integrator of solar systems in Japan. The agreement targets installation of 100 megawatts DC per year of First Solar’s cad-tell thin film module in Japan.
The company sees approximately 500 MW in new opportunities. This is primarily related to continued growth in the U.S. but also driven by new opportunities in Latin America. Â Their opportunity set outside in North America remains robust at 6.8 GW or 54 percent as the total.