Highlights from First Solar's (FSLR) Q1 Conference Call: Manufacturing Cost Down to $0.93/Watt

Shares of First Solar (Nasdaq: FSLR) are rallying nearly 25% today on the back of better-than-expected Q1 earnings which were reported yesterday after the market closed.

Also, notably, there are numerous research firms out this morning commenting on the solid results. Analysts at Piper Jaffray, Gabelli and Deutsche Bank are all out with bullish notes on the stock. Click here to see our write-up on the analyst action.

Below are some highlights from the company's Q1 conference call:

• results were driven by production of 219.5MW, up 26% sequentially. Annual capacity per line was up to 49.4 megawatts, up 4% from Q4.
  
• Conversion efficiency averaged 10.9% for the quarter, that's up 0.1% quarter-over-quarter.
  
• Manufacturing cost declined to $0.93 per watt, down 5% from Q4 and down 18% from the same period last year. The reduction was driven by lower Malaysia costs amid higher volumes.
  
• added 479MW of new volumes in Q1: 361MW in Europe, 23MW in Canada and 95MW in the U.S.
  
• by 2012 sees manufacturing cost of about $0.65 per watt.
  
• sees low natural gas prices as having an impact in the short-term on expansion of state programs.
  
• gross margin for the quarter was 56.3%, up 240 basis points from Q408, driven by lower manufacturing costs and customer mix partially offset by lower ASP's and the decline in the blended euro exchange rate underlying our net sales.
  
• opex declined $5.4 million sequentially due to a reduction in variable compensation expenses and a decrease in plant startup cost, $2.6 million sequentially to 6.2 million, as plant two and three in Malaysia commence production. Operating expenses net of plant startup costs were essentially flat in Q1 at 14.6% of the percentage of net sales.
  
• sees opex rising in Q2 and the following quarters given higher R&D spending as well as increased SG&A spending primarily driven by the OptiSolar acquisition and the related ongoing project development expenses required to realize a full value of the acquired project pipeline.
  
• operating income for Q1 was $168.1 million or 40.2% of net sales up from 161.3 million or 37.2% during the prior quarter.
  
• free cash flow during the quarter was negative by $22.7 million due to the one-time impact of changing our payment terms from 10 days to 45 days and higher shipment rates in second half of Q1.
  
• Cash flow from operations during Q1 was $63.7 million driven by continued revenue growth and offset by increased accounts receivable balance and inventories to support growth.
  
• Cash and all other marketable securities decreased by $10.2 million to $811.6 million in the quarter.

You May Also Be Interested In

• UPDATE: NetApp, Inc. (NTAP) Tops Q4 EPS by 3c; Guides Q1 Lower
• UPDATE: Bristow Group (BRS) Reports Better-Than-Expected Q4 Results; Offers FY13 Outlook
• Tiffany & Co. (TIF) Misses Q1 EPS Views; Lowers FY12 EPS, Revs Growth Outlook

Create E-mail Alert Related Categories

Corporate News, Earnings

Related Entities

Piper Jaffray, Deutsche Bank

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?

Follow StreetInsider.com On Twitter