First Solar Inc.'s second-quarter profit surged on higher
project revenue and a one-time tax gain.
For the year, it projects profit of $3.30 to $3.60 a share on
net sales between $3.5 billion to $3.6 billion, compared with
analysts' projection of $2.36 a share on $3.44 billion in revenue,
according to Thomson Reuters.
Shares, down 0.21% this year, rose 9.6% to $48.75 in late
trading.
First Solar raised its full-year shipment target to between 2.8
gigawatts and 2.9 gigawatts, compared with its earlier view of 2.6
gigawatts and 2.8 gigawatts.
One gigawatt is 1,000 megawatts, roughly the amount produced by
an average nuclear reactor, and can power 164,000 homes on average,
according to the Solar Energy Industry Association. Weather and
other factors affect a system's energy production.
Renewable energy companies like First Solar are expected to
benefit from tighter federal regulations to cut greenhouse
gases.
Tempe, Ariz.-based First Solar had ramped up factory production
and expanded abroad to soften the expected impact of a tax-credit
cut in 2017.
Overall, First Solar reported a profit of $94.5 million, or 93
cents a share, compared with $4.5 million, or four cents a share, a
year earlier. First Solar reported a tax gain of about $42
million.
Net sales surged nearly 65% to $896.2 million with 537 megawatts
of new bookings, bringing its year-to-date bookings to 1.4
gigawatts.
First Solar had projected a profit of 45 cents to 55 cents a
share on sales of $750 million to $850 million.
Gross margin improved to 18.4% from 17% a year earlier.
First Solar ended the quarter with $1.8 billion of cash and
marketable securities, which can be quickly turned into cash,
bolstered by a one-time payment from the initial public offering of
its "yieldco" with SunPower Corp.
Yield companies, or yieldcos as they are known on Wall Street,
are publicly traded companies, similar to real-estate investment
trusts and master limited partnerships, that hold power plants and
issue regular dividends to shareholders.
8point3 Energy Partners LP raised about $394 million in its June
19 IPO, paying out the bulk of that money to First Solar and
SunPower.
Shares of the partnership, which opened below the $21 offering
price, have fallen 28% through Tuesday's $14.90 closing.
Write to Maria Armental at maria.armental@wsj.com
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