While competitors including Solar Frontier and Hanergy are emerging, First Solar has long been the leading thin film player in the photovoltaic industry, having continually ramped up production (it has manufactured over seven GW of its cadmium telluride (CdTe) modules to date); project development activities (it has a PV systems pipeline totaling 2.9 GW); and efficiencies.
In reporting its FY 2012 financial results, the U.S.-based manufacturer recorded an average production module efficiency of 12.9% in Q4, up from 12.2% in Q3. Meanwhile, its lead production line was churning out thin film modules with an efficiency of 13.1%, up from 12.&% in 2011.
In its latest announcement, First Solar has now achieved a world record CdTe thin film photovoltaic cell conversion efficiency of 18.7%, which has been confirmed by the U.S. Department of Energy's National Renewable Energy Laboratory (NREL). Reportedly, the cell was produced using "processes and materials designed for commercial-scale manufacturing."
Financial nitty gritty
The efficiency gains are good news for First Solar, and should act as a welcome distraction from its annual financial results, which didnt come up quite as rosy. Saying that, the company did perform admirably compared to the majority of its industry peers, particularly in Q4, demonstrating that thin film still has a place in the crystalline silicon dominated photovoltaic industry.
In Q3, the company revised its FY net sales guidance down from $3.6 billion to $3.9 billion, to $3.5 billion to $3.8 billion. Despite this measure, sales came in at $3.4 billion. This may be below guidance, but First Solar did set a record and increased sales from the previous year ($2.8 billion).
Q4 also saw sales rise, from $839 million in Q3, and $660 million in Q4 2011, to another record of $1.1 billion. "The increase in net sales from the third quarter of 2012 was primarily due to increased revenue recognition for the Topaz project, and an increase in third-party module sales," explained First Solar in a statement released. It didn't comment on the missed guidance, however.
Q4 additionally saw a net income of $154.1 million, up from $88 million in Q3, and up significantly from a net loss of $413.1 million in Q4 2011. Despite this, FY 2012 recorded a net loss of $96.3 million, vastly down on the $39.5 million seen in 2011. These results led to earnings per fully diluted share of $1.74 in Q4, compared to $1 in Q3, and a loss of $4.78 in Q4 2011; and a loss per fully diluted share of $1.11 for the FY, compared to $0.46 in 2011.
Looking at operating expenses, First Solar saw expenses drop from $623.4 million in Q4 2011, to $121.5 million in Q4 2012, and $890 million in 2012, compared to $1 billion in 2011. Meanwhile, Q4 saw an operating income of $172 million, as opposed to a loss of $485.3 million in Q4 2011, while the FY recorded an operating loss of $37.6 million, compared to $68.7 million in 2011.
Regarding module production, First Solar manufactured 512 MW of modules in Q4 (at a cost per Watt of $0.68), up 5% on Q3, and 1.87 GW for the FY (at a cost per Watt of $0.70), down 5% on 2011. Capacity utilization, meanwhile, was running at 84% in Q4, and 78% for the FY, thus representing an annual decline of 20%.
Overall, GTM Researchs Shyam Mehtas expects consolidation to continue at pace within the thin film industry segment in 2013 and that within two to three years, First Solar, Solar Frontier and Hanergy will make up 90% of the thin film industry.
Acknowledging the still rocky photovoltaic market conditions, First Solar is positive about its onward progress in the industry. "We expect the market will remain turbulent for some time to come, but we have seen some evidence of improvement and believe we have the right strategy in place to retain our industry leadership by providing the best value for our customers," stated CEO, Jim Hughes
In Q1 2013, the company expects to reap net sales of between $650 million and $750 million, gross margin on 25 to 27% and earnings per fully diluted share of $0.70 to $0.90 in Q1 2013.
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