Blaming weaker than expected revenue earnings on poor weather and other factors, First Solar lowered its 2011 revenue guidance and separately announced a restructuring of its core business groups with the exit of TK Kallenbach, president of the Components Business Group, at the end of the year. Restructuring will lead to a workforce reduction of approximately 100 associates, around 1.5% of its workforce, according to the company. First Solar revised 2011 guidance in the range of US$2.8 to US$2.9 billion, down from a prior guidance range of between US$3.0 and US$3.3 billion.
“Our diverse business model and robust project pipeline will help First Solar generate a significant amount of cash in 2012 while improving operational efficiencies, but we are recalibrating our business to focus on building and serving sustainable markets rather than pursuing subsidized markets,” commented Mike Ahearn, chairman and interim CEO of First Solar. “By channeling our core strength in utility-scale PV systems to markets with immediate need for mass-scale renewable energy our goal is to earn substantially all of our new revenues from sustainable markets by the end of 2014.”
The comments by Ahearn echoed those made during First Solar’s third-quarter conference call.
Importantly and significantly, First Solar guided net sales for 2012 to be in the range of US$3.7 to US$4.0 billion, including approximately US$1.7 billion from the systems business.
First Solar said that it expects to generate around US$0.9 to US$1.1 billion of operating cash flow in 2012 and plans to spend in the range of US$375-US$425 million in capital investments next year.
Updates to follow from conference call.
Ahearn noted that the barriers to entry in the PV industry have gone and that pricing pressures are set to continue almost indefinitely. Abundant polysilicon and manufacturing capacity changes the game, while subsidized markets with FiTs are declining.