FSLR
$59.92
First Solar
($.26)
(.43%)
Earnings Details
3rd Quarter September 2017
Thursday, October 26, 2017 4:02:02 PM
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Summary

First Solar Beats

First Solar (FSLR) reported 3rd Quarter September 2017 earnings of $1.95 per share on revenue of $1.1 billion. The consensus earnings estimate was $0.85 per share on revenue of $798.8 million. The Earnings Whisper number was $0.97 per share. Revenue grew 58.0% on a year-over-year basis.

The company said it now expects 2017 earnings of $2.40 to $2.60 per share and continues to expect revenue of $3.00 billion to $3.10 billion. The company's previous guidance was earnings of $2.00 to $2.50 per share and the current consensus earnings estimate is $2.22 per share on revenue of $3.05 billion for the year ending December 31, 2017.

First Solar Inc is a provider of solar energy solutions. It designs, manufactures and sells PV solar modules with a thin-film semiconductor technology. It also manufactures crystalline silicon solar modules.

Results
Reported Earnings
$1.95
Earnings Whisper
$0.97
Consensus Estimate
$0.85
Reported Revenue
$1.09 Bil
Revenue Estimate
$798.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

First Solar, Inc. Announces Third Quarter 2017 Financial Results

GAAP EPS of $1.95

--Cash and marketable securities of $2.7 billion, net cash of $2.4 billion

--4.5GWdc quarterly net bookings, 6.7GWdc YTD net bookings

--Raises EPS guidance for 2017

First Solar, Inc. (FSLR) today announced financial results for the third quarter of 2017. Net sales for the third quarter were $1.1 billion, an increase of $464 million from the prior quarter primarily due to the sale of the California Flats and Cuyama projects, and higher third-party module sales.

The Company reported third quarter earnings per share ("EPS") of $1.95, compared to EPS of $0.50 in the prior quarter. The third quarter was impacted by pre-tax restructuring and asset impairment charges of less than $1 million, compared to $18 million in the second quarter. Net income increased versus the prior quarter primarily as a result of higher net sales, improved gross margin and lower restructuring charges. Third quarter non-GAAP EPS, adjusted for restructuring and asset impairment charges, was $1.95, compared to $0.64 in the second quarter.

Cash and marketable securities at the end of the third quarter increased to $2.7 billion from $2.2 billion in the prior quarter. The increase primarily resulted from cash received from projects sold in the third quarter. Cash flows from operations were $581 million in the third quarter.

"Third quarter results were highlighted by record bookings and strong earnings resulting from the sale of our California Flats project," said Mark Widmar, CEO of First Solar. "Our 4.5GWdc of bookings demonstrates both the robust market demand for our Series 4 and Series 6 module technology, and the acceleration of procurement timing by certain customers. Closing the sale of our California Flats project was also an important milestone toward achieving our financial guidance for the year. While we are pleased with our recent results, we continue to be intently focused on the success of our Series 6 transition."

Based on results for the third quarter, the Company updated 2017 guidance as follows:

2017 Guidance
Prior GAAP
Current GAAP
Prior Non-GAAP
Current Non-GAAP
Net Sales
$3.0B to $3.1B
Unchanged
Gross Margin %
17.0% to 18.0%
18.0%
Operating Expenses
$370M to $395M
$370M to $385M
$330M to $340M
Unchanged
Operating Income
$115M to $180M
$165M to $190M
$170M to $220M
$210M to $230M
Earnings per Share
$1.55 to $2.20
$2.05 to $2.30
$2.00 to $2.50
$2.40 to $2.60
Net Cash Balance(1)
$2.1B to $2.3B
Unchanged
Operating Cash Flow
$850M to $950M
Unchanged
Capital Expenditures
$400M to $500M
Unchanged
Shipments
2.6GW to 2.7GW
Unchanged
1.
Defined as cash and marketable securities less expected debt
at the end of 2017.

For a reconciliation of the non-GAAP measures presented above to measures presented in accordance with generally accepted accounting principles in the United States ("GAAP"), see the tables below.

First Solar has scheduled a conference call for today, October 26, 2017 at 4:30 p.m. ET to discuss this announcement. A live webcast of this conference call will be available at http://investor.firstsolar.com. An audio replay of the conference call will also be available approximately two hours after the conclusion of the call. The audio replay will remain available until Nov 2, 2017 at 7:30 p.m. ET, and can be accessed by dialing 888-203-1112 if you are calling from within the United States or 719-457-0820 if you are calling from outside the United States and entering the replay pass code 6807520. A replay of the webcast will be available on the Investors section of the Company’s website approximately two hours after the conclusion of the call and will remain available for approximately 90 calendar days.

About First Solar, Inc.

First Solar is a leading global provider of comprehensive photovoltaic ("PV") solar systems which use its advanced module and system technology. The Company’s integrated power plant solutions deliver an economically attractive alternative to fossil-fuel electricity generation today. From raw material sourcing through end-of-life module recycling, First Solar’s renewable energy systems protect and enhance the environment. For more information about First Solar, please visit www.firstsolar.com.

For First Solar Investors

This release contains forward-looking statements which are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements, among other things, concerning: effects on our financial statements and guidance resulting from certain module manufacturing changes and associated restructuring activities; our business strategy, including anticipated trends and developments in and management plans for our business and the markets in which we operate; future financial results, operating results, revenues, gross margin, operating expenses, products, projected costs (including estimated future module collection and recycling costs), warranties, solar module technology and cost reduction roadmaps, restructuring, product reliability, investments in unconsolidated affiliates and capital expenditures; our ability to continue to reduce the cost per watt of our solar modules; the impact of public policies, such as tariffs or other trade remedies imposed on solar cells and modules; our ability to expand manufacturing capacity worldwide; our ability to reduce the costs to construct PV solar power systems; research and development programs and our ability to improve the conversion efficiency of our solar modules; sales and marketing initiatives; and competition. These forward-looking statements are often characterized by the use of words such as "estimate," "expect," "anticipate," "project," "plan," "intend," "seek," "believe," "forecast," "foresee," "likely," "may," "should," "goal," "target," "might," "will," "could," "predict," "continue" and the negative or plural of these words and other comparable terminology. Forward-looking statements are only predictions based on our current expectations and our projections about future events. You should not place undue reliance on these forward-looking statements. We undertake no obligation to update any of these forward-looking statements for any reason. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include, but are not limited to, the matters discussed in Item 1A "Risk Factors," of our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission.

FIRST SOLAR, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands, except
share data)
(Unaudited)
September 30,
December 31,
2017
2016
ASSETS
Current assets:
Cash and cash equivalents
$ 2,019,073
$ 1,347,155
Marketable securities
699,544
607,991
Accounts receivable trade, net
344,645
266,687
Accounts receivable, unbilled and retainage
455,118
206,739
Inventories
217,555
363,219
Balance of systems parts
20,892
62,776
Project assets
67,263
700,800
Note receivable, affiliate
--
15,000
Prepaid expenses and other current assets
142,404
217,462
Total current assets
3,966,494
3,787,829
Property, plant and equipment, net
940,119
629,142
PV solar power systems, net
454,483
448,601
Project assets
406,396
762,148
Deferred tax assets, net
276,423
255,152
Restricted cash and investments
408,873
371,307
Investments in unconsolidated affiliates and joint ventures
227,661
234,610
Goodwill
14,462
14,462
Other intangibles, net
81,765
87,970
Inventories
110,412
100,512
Notes receivable, affiliates
69,432
54,737
Other assets
98,173
77,898
Total assets
$ 7,054,693
$ 6,824,368
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
130,704
$
148,730
Income taxes payable
4,396
12,562
Accrued expenses
317,325
262,977
Current portion of long-term debt
13,451
27,966
Deferred revenue
69,095
308,704
Other current liabilities
44,046
146,942
Total current liabilities
579,017
907,881
Accrued solar module collection and recycling liability
163,707
166,277
Long-term debt
330,209
160,422
Other liabilities
469,364
371,439
Total liabilities
1,542,297
1,606,019
Commitments and contingencies
Stockholders’ equity:
104
104
Common stock, $0.001 par value per share; 500,000,000 shares
authorized; 104,431,990
and 104,034,731 shares issued and
outstanding at September 30, 2017 and
December 31, 2016,
respectively
Additional paid-in capital
2,788,467
2,765,310
Accumulated earnings
2,729,681
2,462,842
Accumulated other comprehensive loss
(5,856 )
(9,907 )
Total stockholders’ equity
5,512,396
5,218,349
Total liabilities and stockholders’ equity
$ 7,054,693
$ 6,824,368
FIRST SOLAR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In
thousands, except per share amounts)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2017
2016
2017
2016
Net sales
$ 1,087,026
$ 681,276
$ 2,602,143
$ 2,573,768
Cost of sales
795,226
510,368
2,115,266
1,943,198
Gross profit
291,800
170,908
486,877
630,570
Operating expenses:
Selling, general and administrative
50,546
60,345
147,702
191,624
Research and development
20,850
32,173
64,990
95,291
Production start-up
12,624
752
22,155
807
Restructuring and asset impairments
791
4,314
39,108
89,846
Total operating expenses
84,811
97,584
273,955
377,568
Operating income
206,989
73,324
212,922
253,002
Foreign currency loss, net
(3,968 )
(2,296 )
(6,166 )
(8,259 )
Interest income
8,392
5,894
22,364
18,829
Interest expense, net
(4,149 )
(5,563 )
(19,692 )
(17,356 )
Other income, net
2,018
6,419
25,180
48,725
Income before taxes and equity in earnings of unconsolidated
209,282
77,778
234,608
294,941
affiliates
Income tax (expense) benefit
(7,580 )
68,205
26,769
32,886
Equity in earnings of unconsolidated affiliates, net of tax
4,045
4,474
5,462
6,851
Net income
$
205,747
$ 150,457
$
266,839
$
334,678
Net income per share:
Basic
$
1.97
$
1.46
$
2.56
$
3.27
Diluted
$
1.95
$
1.45
$
2.54
$
3.25
Weighted-average number of shares used in per share calculations:
Basic
104,432
103,339
104,287
102,496
Diluted
105,660
103,684
104,889
103,110

Non-GAAP Financial Measures

In the press release above, we provided non-GAAP earnings per share for the three months ended September 30, 2017 and June 30, 2017. We have included these non-GAAP financial measures to adjust for (i) restructuring, asset impairment and related charges primarily associated with the transition from Series 4 to Series 6 production and (ii) the tax effect associated with these items. We believe non-GAAP earnings per share, when taken together with corresponding GAAP financial measures, to be relevant and useful information to our investors because it provides them with additional information in assessing our financial operating results. Our management uses this non-GAAP financial measure in evaluating our operating performance. However, this measure has limitations, including that it excludes the effect of certain changes to our assets and liabilities and certain amounts that we may ultimately have to pay in cash. Accordingly, this non-GAAP financial measure should be considered in addition to, and not as a substitute for, or superior to earnings per share prepared in accordance with GAAP. The following is the reconciliation of earnings per share prepared in accordance with GAAP to non-GAAP earnings per share for each period presented (in millions, except per share amounts):

Three Months Ended
September 30, 2017
Net income
$
205.7
Restructuring and asset impairments
0.8
Tax effect*
(0.1 )
Non-GAAP net income
$
206.4
Weighted-average number of shares used for diluted earnings per share
105.7
Diluted GAAP earnings per share
$
1.95
Diluted Non-GAAP earnings per share
$
1.95
*
Restructuring treated as a non-discrete item for tax purposes
and will be reflected in the effective tax rate over the
duration
of 2017.
Three Months Ended
June 30, 2017
Net income
$ 52.0
Restructuring and asset impairments
18.3
Tax effect*
(3.8 )
Non-GAAP net income
$ 66.5
Weighted-average number of shares used for diluted earnings per share
104.6
Diluted GAAP earnings per share
$ 0.50
Diluted Non-GAAP earnings per share
$ 0.64
*
Restructuring treated as a non-discrete item for tax purposes
and will be reflected in the effective tax rate over the
duration
of 2017.

In the press release above, we provided non-GAAP guidance as of the date of this press release for our operating expenses, operating income and earnings per share for the year ending December 31, 2017. We have included these forward-looking non-GAAP financial measures to adjust our GAAP projections of such financial measures for, as applicable, (i) restructuring, asset impairment and related charges primarily associated with the transition from Series 4 to Series 6 production and (ii) additional restructuring activities expected during the remainder of the year. Other GAAP charges, including those related to certain asset impairments or restructuring programs, that would be excluded from non-GAAP earnings per share are possible for the periods presented, but such amounts are dependent on numerous factors that we currently cannot ascertain with sufficient certainty or are presently unknown. These GAAP charges are also dependent upon future events and valuations that have not yet occurred or been performed. We believe these forward-looking non-GAAP financial measures, when taken together with our corresponding financial guidance based on GAAP, to be relevant and useful information to our investors because they provide them with additional information in assessing our financial operating results. Our management also uses such non-GAAP guidance in evaluating our operating performance. However, such measures have limitations, including that they exclude the effect of certain changes to our assets and liabilities, certain amounts that we may ultimately have to pay in cash and certain tax impacts. Accordingly, these forward-looking non-GAAP financial measures that exclude the aforementioned items should be considered in addition to, and not as substitutes for or superior to, financial guidance based on GAAP. The following are the reconciliations of our current and prior non-GAAP 2017 guidance to our current and prior GAAP 2017 guidance (in millions, except per share amounts):

Reconciliation of Non-GAAP 2017 Guidance to GAAP 2017 Guidance
GAAP Guidance
Restructuring
Non-GAAP Guidance
Charges
Operating Expenses
$370 to $385
$(40) to $(45)
$330 to $340
Operating Income
$165 to $190
$45 to $40
$210 to $230
Earnings per Share
$2.05 to $2.30
$0.35 to $0.30
$2.40 to $2.60
1.
$40 to $45 million of restructuring related charges associated
with our transition from Series 4 to Series 6 module
manufacturing.
Reconciliation of Prior Non-GAAP 2017 Guidance to Prior GAAP
2017 Guidance
GAAP Guidance
Restructuring
Non-GAAP Guidance
Charges(1)
Operating Expenses
$370 to $395
$(40) to $(55)
$330 to $340
Operating Income
$115 to $180
$55 to $40
$170 to $220
Earnings per Share
$1.55 to $2.20
$0.45 to $0.30
$2.00 to $2.50
1.
$40 to $55 million of restructuring related charges associated
with our transition from Series 4 to Series 6 module
manufacturing.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20171026006538r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20171026006538/en/

SOURCE: First Solar, Inc.

First Solar Investors
Steve Haymore
+1 602-414-9315
stephen.haymore@firstsolar.com
or
First Solar Media
Steve Krum
+1 602-427-3359
steve.krum@firstsolar.com