By Maria Armental
First Solar Inc. swung to a loss in the first quarter as revenue
plunged, saddled by project delays and completed projects held
ahead of its proposed joint venture with fellow solar-panel maker
SunPower Corp.
The Tempe, Ariz., company had warned last quarter it would post
a loss in the quarter as it held on to completed projects, rather
than sell them, as it moved to form a "yieldco" with SunPower.
Shares, down nearly 12% over the past 12 months, were down 4% to
$57.20 in late trading.
Trading, suspended at 4:25 p.m. ET, resumed at 5:20 p.m. ET.
Similar to real-estate investment trusts and master limited
partnerships, yield companies, known on Wall Street as yieldcos,
are publicly traded companies that hold power plants and issue
regular dividends to shareholders.
First Solar and SunPower plan to take their venture public by
Dec. 31, according to regulatory filings.
In the current quarter, First Solar projects a profit of 45
cents to 55 cents a share on net sales of $750 million to $850
million, compared with the consensus of a profit of 40 cents a
share on revenue of $779.7 million, according to Thomson
Reuters.
First Solar has been expanding internationally to soften the
expected impact of a slowdown in installations in the U.S. as a 30%
tax credit is scheduled to drop to 10% after Dec. 31, 2016.
The company is also ramping up factory production and adding two
production lines at its Ohio plant ahead of the tax-credit cut,
Chief Executive James A. Hughes said in a conference call with
analysts, adding the company is "virtually sold out" for 2015 and
is increasing contracted volumes for 2016.
Production in the first quarter was 540 megawatts, up 6% from
the preceding quarter and up 22% from the year-before period.
Mr. Hughes said First Solar shipped 690 megawatts in the first
quarter, its highest volume in a single quarter, and expects to
ship between 2.6 gigawatts and 2.8 gigawatts for the year.
Meanwhile, First Solar reported 593 megawatts of new bookings,
bringing its year-to-date bookings to 905 megawatts.
One gigawatt, or 1,000 megawatts--roughly the amount produced by
an average nuclear reactor--can power 216,000 homes in California
and 155,000 in New York, according to the Solar Energy Industry
Association. Weather and other factors affect a system's energy
production.
Overall, for the latest period, First Solar reported a net loss
of $62.3 million, or 62 cents a share, compared with a year-earlier
profit of $112 million, or $1.10 a share.
Net sales plunged nearly 51% to $469.2 million, as the company
kept completed projects on its balance sheets ahead of its proposed
venture with SunPower and was also hurt by delays, from permitting
to shipping due to disruptions at West Coast ports. Company
officials said they expect to record that revenue in later
quarters.
First Solar had projected a loss of 25 cents to 35 cents a share
on sales of $550 million to $650 million.
Gross margin narrowed to 8.3% from 24.9% a year earlier.
Write to Maria Armental at maria.armental@wsj.com
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