First Solar see strong future despite diminishing returns
First Solar announced financial results for the third quarter of 2012. The company fortunes decreased quarter on quarter but they maintained that the overall results are strong considering the current market scenario.
Net sales were $839 million in the quarter, a decrease of $118 million from the second quarter of 2012 and $167 million from the third quarter of 2011. The decrease in net sales from the second quarter of 2012 was primarily due to project-specific decreases including Silver State North, which was completed in the second quarter, and reduced construction activity at Agua Caliente, consistent with the Company's planned construction schedule. The decrease was partially offset by initial revenue recognition for the 550-megawattac Topaz Solar Farms project, which began construction in late 2011.
The Company reported third quarter net income of $1.00 per fully diluted share, compared to net income of $1.27 per fully diluted share in the second quarter of 2012 and net income of $2.25 per fully diluted share in the third quarter of 2011. The third quarter of 2012 was impacted by pre-tax charges of $24.2 million (reducing EPS by $0.27), relating to previously announced restructuring actions.
Cash and Marketable Securities at the end of the third quarter were $717 million, down slightly from $744 million at the end of the second quarter of 2012.
Net sales of $3.5 to $3.8 billion, compared to prior guidance of $3.6 to $3.9 billion. The reduction is due to weather-related disruptions in our supply chain and at certain project sites which may push the expected closing of the project sales from Q4 2012 into Q1 2013. Non-GAAP earnings per fully diluted share of $4.40 to $4.70, compared to prior guidance of $4.20 to $4.70, in each case excluding restructuring and impairment charges and certain costs in excess of normal warranty expense related to the previously announced manufacturing excursion expected, which are expected to reduce 2012 earnings per fully diluted share by approximately $6.00. On a GAAP basis, earnings per fully diluted share are expected to be in the range of $(1.60) to $(1.30). Operating Cash Flows of $650 to $850 million, compared to our previous guidance of $850 to $950 million, primarily due to the aforementioned weather-related disruptions for certain projects.
"Despite continued uncertainties and over-supply conditions in the market, First Solar delivered another strong quarterly performance," said Jim Hughes, CEO. "Our quarterly performance coupled with our recent project wins in sustainable markets demonstrates we are making meaningful progress in achieving our strategic plan for long-term growth and value creation."
