First Solar on track under Jim Hughes, reports record net sales for the fourth quarter and for 2012

By Editor


Greentech Lead America:First Solar has reported record net sales of 1.1 billion for the fourth quarter, an increase of $236 million from the third quarter of 2012 and $415 million from the fourth quarter of 2011.The increase in net sales from the third quarter of 2012 was primarily due to increased revenue recognition for the Topaz project, and an increase in third-party module sales. Net sales for 2012 were $3.4 billion, up 22 percent from 2011.“Despite a very challenging market environment, we continued to make meaningful progress in all critical value drivers for the Company,” said Jim Hughes, CEO of First Solar. “We exceeded our module and balance-of-systems cost reduction targets for 2012, as announced in December 2011, further increased module efficiency and field performance, and achieved several key objectives in our strategy to develop and service new sustainable energy markets.”

Jim Hughes, CEO of First Solar

Earlier this year First Solar acquired Solar Chile    and established subsidiaries in India, the Middle East, South Africa and Thailand. The company set new world record for CdTe cell efficiency at 18.7 percent. Increased average module efficiency to 12.9 percent for the fourth quarter of 2012, up 0.7 percentage points from the fourth quarter of 2011.

In another significant achievement last year, First Solar reduced the average module manufacturing costs on its best lines to $0.64 per watt (excluding underutilization), down from $0.69 in the fourth quarter of 2011.

During this period, the solar provider  surpassed 250 MWAC of grid-connected power at Agua Caliente, making it the world’s largest operational solar power plant. It also surpassed 7 GWDC of cumulative production, enough to provide clean electricity for approximately 3.5 million homes and displace 4.7 million metric tons of CO₂ annually.

As per the guidance for the first quarter of 2013, the company expects net sales of $650 to $750 million, gross margin of 25-27 percent, OPEX of $90 to $100 million, operating income of $70 to $100 million, tax rate between 11 percent and 13 percent, EPS of $0.70 to $0.90 per fully diluted share, cash flow from operations of $0 to $100 million.

The CAPEX for the first quarter of 2013 is expected to be $80 to $100 million while OPEX will be $90 to $100 million.

“We expect the market will remain turbulent for some time to come, but we have seen some evidence of improvement and believe we have the right strategy in place to retain our industry leadership by providing the best value for our customers,” Hughes said.

James Hughes, who joined First Solar in March as chief commercial officer, took over as CEO in May 2012.

The company lost $449 million in the first three months of 2012 mainly due to the oversupply challenges and the failing solar subsidies in its main target markets like Germany and Spain. The oversupply has pushed prices for solar panels down, cutting into the advantage First Solar had over competitors.

Hughes took over as CEO from Michael Ahearn, the founding CEO, who joined on an interim basis after the Board of Directors fired Rob Gillette, the CEO of two years, in October. It was the period when the company’s troubles started showing up in its financial results.

The company reported a $413 million loss for the fourth quarter of 2011, after Gillette’s departure.

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