Updated: Two of the largest US-based PV manufacturers, First Solar and SunPower, both reported first-quarter sales at the same time, both showing quarter-on-quarter sales declines. First Solar reported net sales of US$497 - a decrease of US$163 million from the fourth quarter of 2011. SunPower’s first quarter GAAP revenue was US$494 million, down from US$625.3 in the previous quarter.
First Solar also announced that James Hughes had been appointed chief executive officer. Hughes succeeds Mike Ahearn, First Solar's founder and chairman, who has been serving as interim CEO since October 2011. Hughes joined First Solar in March as chief commercial officer. Ahearn will continue in his role as chairman of the board.
"First Solar's performance in the quarter was impacted by an aggressive competitive environment resulting from persistent supply-demand imbalances in the market, as well as restructuring costs that will improve our operating efficiency and help position us for the future," said Mike Ahearn, chairman of the board. "Looking forward, we are confident we have the right long-term strategy and the right platform to enable long-term growth and value creation. We believe that by executing our strategic roadmaps and completing our restructuring program we can achieve our targets of 2.6 to 3.0GW of sales in sustainable markets, earning a return on invested capital of 13 to 17% by 2016."
The company also made a further management announcement via a press statement. Halfway through the conference call to discuss first-quarter results, it was announced that chief technology officer, Dave Eaglesham, was retiring and his replacement would be Raffi Garabedian, First Solar’s vice president of Advanced Technologies.
On a financial level the key data was only to be found in the SEC filing or financial tables – not within the initial press release. The company noted losses on a per-share basis, shedding light on an actual quarterly loss of US$449 million. This figure was significantly off most analysts' expectations of earnings of US$0.08 cents per share on an adjusted basis on the back of revenue of US$691 million. First Solar actually made a loss of US$0.8 cents per share.
In the fourth quarter of 2011, First Solar reported an operating loss of US$485.3 million and a net loss of US$413.1 million, close to a US$1 billion overall loss in the last six months.
With its recent manufacturing restructuring announcements, expectations of any significant revision were not founded. However, management noted in the call that it would have to continue capital expenditure on completing its plant in Vietnam due to contractual agreements, despite not needing the extra capacity. The same was said to have applied to its under-construction production facility in Mesa, Arizona.
To make matters worse, CFO Mark Widmar added that due to previously planned and executed orders with equipment suppliers for last year's capacity expansions, capital spending in the first quarter was not inline with its current overall cost constraint targets.
However, capital expenditure would be reduced in the second half of the year as these payment obligations are negated.
On a positive note, Widmar noted in the call that First Solar’s most efficient production line (no location or line number given) had achieved module efficiencies of 13.1%.
The average across all lines had increased to 12.4% with the revised expected target of hitting 12.9% up from 12.6% by the end of 2012.