Solar earnings season is in full swing and, just as SunPower did yesterday, First Solar has now given a full look at how the company fared in dealing with the Covid-19 pandemic. And again, like SunPower, First Solar was able to take the crisis head-on and survive for a successful Q2.
Much of this success was due to the measures the company took to mitigate manufacturing disruptions, which were significantly bolstered by First Solar’s Vietnamese facility, as Vietnam has been relatively lucky and successful in terms of Covid-related effects and response.
Financial highlights from the American solar manufacturer’s first quarter:
- Net sales of $642 million, up from $532 million in Q1
- Net income per share of $0.35, down from $0.85 per share in Q1
- Net cash of $1.2 billion, up 0.1 billion since Q1
- 0.8 GW of bookings since prior earnings call, including 0.5 GW of systems bookings, down from 1.1 GW and 0.7 GW in Q1
- Fleet-wide capacity utilization of over 100% during May, June and July
- An updated 2020 guidance — more on that later
In reality, the biggest issue that First Solar felt related to the pandemic was a consolidation of shipping routes, which led to some capacity constraints, though not enough to cause any significant disruption.
Early on in the earnings call, CEO Mark Widmar announced that the company has joined the RE 100 movement, a pledge taken by some of the biggest corporations in the world to make the switch to being 100% powered by renewable energy.
Being a company in the business of renewable energy, First Solar expects to achieve 100% renewable energy across its American operations by 2026, with total global operations going 100% renewable by 2028.
The company will now be running with two co-chief technology officers, with the appointment of Markus Gloeckler to that position. Gloeckler joins Raffi Garabedian, who has served in that role since 2012. The reasoning behind the appointment is to allow Gloeckler to overlook all things Series 6, while Garabedian will focus on the development of future Cadmium-Telluride technologies.
First Solar also announced that COO Tymen deJong, whose expected April 2021 retirement was previously announced, will have his responsibilities overseen by Chief Manufacturing Operations Officer Mike Koralewski, Chief Manufacturing Engineering Officer Kuntal Kumar Verma and Chief Quality and Reliability Officer Pat Buehler.
Gloeckler, Koralewski, Kumar Verma and Buehler will all join First Solar’s executive leadership team.
New guidance for 2020
After withdrawing the initial 2020 guidance in February, First Solar was able to provide an updated outlook, — which shows how effectively the company weathered Covid.
- Full-year production projection of 5.9 GW remains unchanged and will be composed of 5.7 GW of Series 6 modules and 0.2 GW of Series 4 modules
- Series 6 manufacturing capacity plans are unchanged, with expected capital expenditures between $450 million and $500 million
- Estimated operating expenses increased by $5 million, now $345 million to 365 million
- Anticipated gross margin improvements in 2H 2020 and no expectations to draw on the company’s revolving credit facility
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