First Solar earnings: strong Q1 and an uncertain 2020 guidance — like most every solar firm

“Despite the uncertain economic environment, demand for our Series 6 product remains strong, as evidenced by the 1.1 GWDC of net-bookings since our prior earnings call.”

Image: First Solar

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It’s solar earnings season and there’s a clear, non-surprising theme: The first quarter was strong and largely unimpacted by the pandemic, but the second quarter and 2020 as a whole is uncertain.

We’ve already heard that story this week from Sunrun, Enphase and SolarEdge and now it’s First Solar’s turn.

Financial highlights from the American solar manufacturer’s first quarter:

  • Net sales of $532 million, down from $867 million in Q4
  • Net income per share of $0.85 — compared to a net loss per share of $(0.56) in Q4
  • Net cash of $1.1 billion
  • 1.1 GW of bookings since prior earnings call, including 0.7 GW of systems bookings
  • Fleet-wide capacity utilization of over 100% during March and April
  • Previous 2020 guidance withdrawn

“Despite the uncertain economic environment, demand for our Series 6 product remains strong, as evidenced by the 1.1 GW of net bookings since our prior earnings call,” said the CEO.

Solar manufacturing considered essential in Ohio and Malaysia

First Solar’s Ohio facility has been permitted to operate as an essential business — as has its Malaysian facility. There was a decrease in March and April manufacturing capacity but May is seeing a return to full capacity at Ohio 2, according to the company.

The lockdown has accelerated the Series 4 module shutdown — and production will not restart in Malaysia.

The company has seen a “limited impact” in supply chain of inbound raw materials and suppliers, while customers are experiencing delays in permitting and the EPC process.

Reasons for optimism

First Solar gave some cause for optimism:

  • The company still sees the fundamental economic catalysts for driving utility-scale solar penetration continuing to grow.
  • Its Series 6 capacity expansion plans are unchanged led by its 12.3 GW in contracted backlog
  • The thin-film pioneer’s mid-term 500 watt module target is unchanged
  • The factory logged 435 average watts per module during April

Withdrawing previous 2020 financial guidance

While First Solar’s financial results have not yet been materially impacted by Covid-19, due to “the significant uncertainty regarding the severity and duration of the Covid-19 pandemic,”  the firm is withdrawing its full-year 2020 guidance.

Here’s a limited guidance First Solar “believes is largely within its control at this time.”

  • Module production: 5.9 GW, including 5.7 GW of Series 6 and 0.2 GW of Series 4
  • Operating expenses: $340 to $360 million
  • Capital expenditures: $450 to $550 million

First Solar’s earlier, pre-Covid guidance was for shipments of 5.8 GW to 6.0 GW.

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