First Solar, Inc. Announces First Quarter 2024 Financial Results

Rhea-AI Summary

First Solar, Inc. announced their first-quarter 2024 financial results, reporting net sales of $794 million, net income per diluted share of $2.20, and a net cash balance of $1.4 billion. They maintained their full-year 2024 P&L guidance, with YTD net bookings of 2.7 GW and an expected sales backlog of 78.3 GW. The company showcased good operating performance, selective bookings, and solid financial results, driven by their differentiated technology and balanced business model.

Positive

• First Solar reported encouraging financial results with net sales of $794 million and a net cash balance of $1.4 billion. They maintained their full-year guidance, showcasing stability and growth potential.

• The company's YTD net bookings of 2.7 GW and an expected sales backlog of 78.3 GW demonstrate a strong demand for their products, indicating future revenue growth.

• First Solar's CEO, Mark Widmar, expressed satisfaction with the company's performance, highlighting their technology's strength, resilience in the industry, and commitment to delivering shareholder value.

Negative

• First Solar experienced a decrease in net sales compared to the previous quarter, primarily due to expected seasonal reductions in module volume sold. This could indicate a potential challenge in maintaining consistent revenue streams.

• The decrease in cash, cash equivalents, restricted cash, and marketable securities, less debt, from $1.6 billion to $1.4 billion at the end of the first quarter, could raise concerns about the company's capital expenditure and financial management.

• The decline in net income per diluted share from $3.25 in the fourth quarter of 2023 to $2.20 in the first quarter of 2024 might suggest a decrease in profitability or efficiency in their operations.

Insights

Financial Analyst

First Solar's reported Q1 2024 net sales of $794 million represent a significant quarter-over-quarter drop. The company's disclosure of a net income per diluted share of $2.20, down from $3.25 in the previous quarter, indicates a decrease in profitability. This dip is attributed to the cyclical nature of module sales, which sees variations throughout the year. The mention of manufacturing capacity expansions correlates with the observed reduction in the company's net cash position to $1.4 billion from $1.6 billion. For long-term stakeholders, the commitment to capital expenditures could suggest a strategic move to scale operations and potentially increase market share. It's worth noting the company's maintenance of full-year 2024 P&L guidance despite the short-term fluctuations, shedding light on management's confidence in the company's fiscal health.

Energy Sector Analyst

The year-to-date net bookings of 2.7 GW at an average selling price of 31.3 cents per watt are noteworthy metrics for investors, as they provide insights into First Solar's market demand and pricing power. The expected sales backlog of an astounding 78.3 GW could be indicative of strong future revenue streams and solidifies First Solar's position in the renewable energy sector. With the renewable energy market's emphasis on technological advancements and cost efficiency, First Solar's mention of 'differentiated technology' hints towards its competitive edge which could be instrumental in staying ahead in the highly competitive solar industry.

Tax Policy Expert

Investors should not overlook the projected impact of Section 45X tax credits on the company's financials. The forecast of $400 million in the first half and $620 million in the second half speaks volumes about the significance of tax incentive programs for renewable energy companies. This sizable credit could substantially lower First Solar's effective tax rate, thus enhancing its earnings. The clear quantification of these figures in the company's guidance provides transparency and helps elucidate the influence of government policy on the renewable energy sector's economics.

• Net sales of $794 million
• Net income per diluted share of $2.20
• Net cash balance of $1.4 billion
• Maintain full-year 2024 P&L guidance
• YTD net bookings of 2.7 GW with an average selling price (“ASP”) of 31.3 cents per watt, excluding adjusters
• Expected sales backlog of 78.3 GW

TEMPE, Ariz.--(BUSINESS WIRE)-- First Solar, Inc. (Nasdaq: FSLR) (the “Company”) today announced financial results for the first quarter ended March 31, 2024.

Net sales for the first quarter were $794 million, a decrease of $0.4 billion from the prior quarter. The decrease was primarily driven by an expected historical seasonal reduction in volume of modules sold.

The Company reported first quarter net income per diluted share of $2.20, compared to net income per diluted share of $3.25 in the fourth quarter of 2023.

Cash, cash equivalents, restricted cash, restricted cash equivalents, and marketable securities, less debt at the end of the first quarter, decreased to $1.4 billion from $1.6 billion at the end of the prior quarter. The decrease was primarily a result of capital expenditures related to manufacturing capacity expansions in Alabama, Louisiana, and Ohio.

“We are pleased with our start to 2024, with good operating performance, selective bookings with a year to date ASP over 31 cents per watt excluding adjusters, and solid financial results,” said Mark Widmar, CEO of First Solar. “Our differentiated technology and balanced business model are enabling us to drive growth, navigate industry volatility and deliver enduring shareholder value.”

Our 2024 guidance has been updated as follows:

	Prior	Current
Net Sales (1)	$4.4B to $4.6B	Unchanged
Gross Margin (1) (2)	$2.0B to $2.1B	Unchanged
Operating Expenses (1) (3)	$455M to $485M	Unchanged
Operating Income (1) (4)	$1.5B to $1.6B	Unchanged
Earnings per Diluted Share (1)	$13.00 to $14.00	Unchanged
Net Cash Balance (5)	$0.9B to $1.2B	$600M to $900M
Capital Expenditures	$1.7B to $1.9B	$1.8B to $2.0B
Volume Sold (1)	15.6GW to 16.3GW	Unchanged

——————————

(1)		From an earnings cadence perspective, we anticipate our net sales and cost of sales profile, excluding the advanced manufacturing production credit available to us under Section 45X of the Internal Revenue Code (“Section 45X tax credit”), to be approximately 35-40% in the first half of the year and 60-65% in the second half of the year. We forecast Section 45X tax credits of approximately $400 million in the first half of the year and $620 million in the second half of the year. With an operating expenses profile roughly evenly split across the year, this results in a forecasted earnings per share profile of approximately 35-40% in the first half of the year and 60-65% in the second half of the year.
(2)		Assumes $40 million to $60 million of ramp costs and $1.0 billion to $1.05 billion of Section 45X tax credits
(3)		Assumes $85 million to $95 million of production start-up expense
(4)		Assumes $125 million to $155 million of production start-up expense and ramp costs, and $1.0 billion to $1.05 billion of Section 45X tax credits
(5)		Defined as cash, cash equivalents, restricted cash, restricted cash equivalents, and marketable securities, less expected debt at the end of 2024

The guidance figures presented above are forward-looking statements that are subject to a variety of assumptions and estimates, including with respect to certain factors related to the Inflation Reduction Act of 2022 (the “IRA”). Among other things, such factors include (i) the total Section 45X tax credit and (ii) the timing and ability to monetize such credit. Investors are encouraged to listen to the conference call and to review the accompanying materials, which contain more information about First Solar’s first quarter 2024 financial results, 2024 guidance, and financial outlook.

Conference Call Details

First Solar has scheduled a conference call for today, May 1, 2024 at 4:30 p.m. ET, to discuss this announcement. A live webcast of this conference call and accompanying materials are available at investor.firstsolar.com. An audio replay of the conference call will be available through Friday, May 31, 2024 and can be accessed by dialing +1 (800) 770-2030 if you are calling from within the United States or +1 (647) 362-9199 if you are calling from outside the United States and entering the replay passcode 99681. A replay of the webcast will also be available on the Investors section of the Company’s website approximately two hours after the conclusion of the call and remain available for 30 days.

About First Solar, Inc.

First Solar is a leading American solar technology company and global provider of responsibly-produced eco-efficient solar modules advancing the fight against climate change. Developed at research and development labs in California and Ohio, the Company’s advanced thin film photovoltaic (“PV”) modules represent the next generation of solar technologies, providing a competitive, high-performance, lower-carbon alternative to conventional crystalline silicon PV panels. From raw material sourcing and manufacturing through end-of-life module recycling, First Solar’s approach to technology embodies sustainability and a responsibility towards people and the planet. For more information, 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. All statements in this release, other than statements of historical fact, are forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning: demand for our technology; increased research and development investment; new domestic and international capacity coming online; production and delivery of our new Series 7 modules; our financial guidance for 2024, including future financial results, net sales, gross margin, operating expenses, operating income, earnings per diluted share, net cash balance, capital expenditures, expected earnings cadence, volume sold, shipments, bookings, products and our business and financial objectives for 2024; the availability of benefits under certain production linked incentive programs, and the impact of the IRA including the total advanced manufacturing production credit available to us under Section 45X of the Internal Revenue Code. 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,” “contingent” 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 and therefore speak only as of the date of this release. 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, whether as a result of new information, future developments or otherwise. 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 our forward-looking statements. These factors include, but are not limited to: structural imbalances in global supply and demand for PV solar modules; our competitive position and other key competitive factors; the reduction, elimination, expiration or introduction of government subsidies, policies, and support programs for solar energy projects; the impact of public policies, such as tariffs or other trade remedies imposed on solar cells and modules; the passage of legislation intended to encourage renewable energy investments through tax credits, such as the IRA; the impact of the IRA on our expected results of operations in future periods, which may be affected by technical guidance, regulations, subsequent amendments or interpretations of the law; interest rate fluctuations and both our and our customers’ ability to secure financing; changes in the exchange rates between the functional currencies of our subsidiaries and other currencies in which assets and liabilities are denominated; our ability to execute on our long-term strategic plans; the loss of any of our large customers, or the ability of our customers and counterparties to perform under their contracts with us; our ability to execute on our solar module technology and cost reduction roadmaps; our ability to improve the wattage of our solar modules; our ability to incorporate technology improvements into our manufacturing process, including the production of bifacial solar modules and the implementation of our Copper Replacement (“CuRe”) program; the satisfaction of conditions precedent in our sales agreements; our ability to attract new customers and to develop and maintain existing customer and supplier relationships; general economic and business conditions, including those influenced by U.S., international, and geopolitical events; environmental responsibility, including with respect to cadmium telluride (“CdTe”) and other semiconductor materials; claims under our limited warranty obligations; changes in, or the failure to comply with, government regulations and environmental, health, and safety requirements; effects arising from and results of pending litigation; future collection and recycling costs for solar modules covered by our module collection and recycling program; supply chain disruptions, including demurrage and detention charges; our ability to protect our intellectual property; our ability to prevent and/or minimize the impact of cyber-attacks or other breaches of our information systems; our continued investment in research and development; the supply and price of components and raw materials, including CdTe; our ability to construct new production facilities to support new product lines in line with anticipated timing; evolving corporate governance and public disclosure regulations and expectations, including with respect to environmental, social and governance matters; our ability to avoid manufacturing interruptions, including during the ramp of our Series 7 modules manufacturing facilities; our ability to attract and retain key executive officers and associates; the severity and duration of public health threats, including the potential impact on our business, financial condition, and results of operations; and the matters discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our most recent Annual Report on Form 10-K, as supplemented by our other filings with the Securities and Exchange Commission.

FIRST SOLAR, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited)
		March 31, 2024				December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents		$	1,682,081			$	1,946,994
Marketable securities			308,016				155,495
Accounts receivable trade, net			669,745				660,776
Government grants receivable, net			184,761				659,745
Inventories			970,871				819,899
Other current assets			425,919				391,900
Total current assets			4,241,393				4,634,809
Property, plant and equipment, net			4,915,686				4,397,285
Deferred tax assets, net			169,767				142,819
Restricted marketable securities			194,482				198,310
Government grants receivable			347,845				152,208
Goodwill			28,735				29,687
Intangible assets, net			61,889				64,511
Inventories			265,034				266,899
Other assets			535,751				478,604
Total assets		$	10,760,582			$	10,365,132
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	239,237			$	207,178
Income taxes payable			52,060				22,134
Accrued expenses			528,060				524,829
Current portion of debt			200,907				96,238
Deferred revenue			692,675				413,579
Other current liabilities			45,778				42,200
Total current liabilities			1,758,717				1,306,158
Accrued solar module collection and recycling liability			134,250				135,123
Long-term debt			418,695				464,068
Deferred revenue			1,375,407				1,591,604
Other liabilities			170,999				180,710
Total liabilities			3,858,068				3,677,663
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 107,041,246 and 106,847,475 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively			107				107
Additional paid-in capital			2,878,330				2,890,427
Accumulated earnings			4,207,682				3,971,066
Accumulated other comprehensive loss			(183,605	)			(174,131	)
Total stockholders’ equity			6,902,514				6,687,469
Total liabilities and stockholders’ equity		$	10,760,582			$	10,365,132

FIRST SOLAR, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)
		Three Months Ended
		March 31, 2024				December 31, 2023				March 31, 2023
Net sales		$	794,108			$	1,158,553			$	548,286
Cost of sales			448,105				656,520				436,235
Gross profit			346,003				502,033				112,051
Operating expenses:
Selling, general and administrative			45,827				57,094				44,028
Research and development			42,742				43,862				30,510
Production start-up			15,408				9,847				19,494
Total operating expenses			103,977				110,803				94,032
Gain on sales of businesses, net			1,115				6,554				(17	)
Operating income			243,141				397,784				18,002
Foreign currency loss, net			(2,858	)			(9,947	)			(5,947	)
Interest income			27,245				23,565				25,822
Interest expense, net			(9,210	)			(7,068	)			(748	)
Other expense, net			(2,799	)			(27,653	)			(1,456	)
Income before taxes			255,519				376,681				35,673
Income tax (expense) benefit			(18,903	)			(27,442	)			6,888
Net income		$	236,616			$	349,239			$	42,561
Net income per share:
Basic		$	2.21			$	3.27			$	0.40
Diluted		$	2.20			$	3.25			$	0.40
Weighted-average number of shares used in per share calculations:
Basic			106,910				106,844				106,675
Diluted			107,407				107,558				107,154

FIRST SOLAR, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
		Three Months Ended March 31,
			2024				2023
Cash flows from operating activities:
Net income		$	236,616			$	42,561
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Depreciation, amortization and accretion			90,584				68,855
Share-based compensation			6,791				6,600
Deferred income taxes			(29,033	)			(55,282	)
Gain on sales of businesses, net			(1,115	)			17
Other, net			(814	)			(698	)
Changes in operating assets and liabilities:
Accounts receivable, trade			17,499				33,933
Inventories			(149,470	)			(122,996	)
Government grants receivable			281,889				(70,114	)
Other assets			(89,610	)			(60,394	)
Income tax receivable and payable			26,239				43,646
Accounts payable and accrued expenses			(160,939	)			(61,552	)
Deferred revenue			37,978				139,713
Other liabilities			1,108				1,113
Net cash provided by (used in) operating activities			267,723				(34,598	)
Cash flows from investing activities:
Purchases of property, plant and equipment			(413,456	)			(370,961	)
Purchases of marketable securities and restricted marketable securities			(569,446	)			(1,470,600	)
Proceeds from maturities of marketable securities			416,971				1,196,334
Other investing activities			(2,697	)			—
Net cash used in investing activities			(568,628	)			(645,227	)
Cash flows from financing activities:
Proceeds from borrowings under debt arrangements, net of issuance costs			105,420				136,000
Repayment of debt			(45,771	)			—
Payments of tax withholdings for restricted shares			(18,952	)			(28,314	)
Net cash provided by financing activities			40,697				107,686
Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents			(1,938	)			1,495
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents			(262,146	)			(570,644	)
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of the period			1,965,069				1,493,462
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of the period		$	1,702,923			$	922,818
Supplemental disclosure of noncash investing and financing activities:
Property, plant and equipment acquisitions funded by liabilities		$	445,963			$	330,830
Proceeds to be received from asset-based government grants		$	154,754			$	—
Acquisitions funded by contingent consideration		$	18,500			$	—

 

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Source: First Solar, Inc.

FAQ

What were First Solar's net sales in the first quarter of 2024?

First Solar reported net sales of $794 million in the first quarter of 2024, a decrease of $0.4 billion from the prior quarter.

What was First Solar's net income per diluted share in the first quarter of 2024?

First Solar reported a net income per diluted share of $2.20 in the first quarter of 2024, compared to $3.25 in the fourth quarter of 2023.

What is First Solar's net cash balance as of the first quarter of 2024?

First Solar had a net cash balance of $1.4 billion as of the first quarter of 2024.

What is First Solar's full-year 2024 P&L guidance?

First Solar maintained their full-year 2024 P&L guidance, indicating stable financial projections for the year.

What were First Solar's YTD net bookings in 2024?

First Solar reported YTD net bookings of 2.7 GW in 2024, with an average selling price of 31.3 cents per watt, excluding adjusters.