First Solar announces vigorous 2014 outlook


First Solar on Wednesday said it expected net sales in 2014 to range between $3.7 and $4 billion and consolidated operating income of between $270 and $320 million – the highest for nearly three years.

Announcing its full-year guidance as well as summary financial targets through 2016, the company predicted its consolidated gross margin to be between 16% and 18%, with diluted earnings per share at between $2.20 and $2.60.

The company also expects to generate $250 to $450 million of operating cash flow and plans for approximately $300 to $350 million in capital expenditures in 2014.

For 2015, the company forecast net sales of between $3.8 to $4.3 billion and for 2016 between $3.8 and $4.5 billion.

Utilizing more rooftops

Looking ahead, First Solar has also revealed this week bold plans to pivot the company’s chief market demographic, switching focus to industrial-scale rooftop installations as demand for large-scale solar farms decreases.

In pursuing smaller projects over the next three years, says First Solar CEO Jim Hughes, the company may increase sales by as much as 36%. "We’re more confident than ever that we can compete for rooftops," he told Bloomberg.

"Quite possibly it will be our biggest growth segment, but we’re starting from a small base."

Last year, the Tempe, Arizona-based company generated 65% of its sales from selling large solar PV plants to utilities. But as power companies begin to meet state requirements to meet solar energy objectives, demand is slowly tailing off. In response, First Solar has explored international utility markets, most notably in the Middle East, but also in India and South America, as well as readying its business model for an uptake in domestic rooftop installations.

The company is currently competing for 15 commercial projects totaling 45 MW, of which 15 MW is, according to COO Georges Antoun, set aside for First Solar. If successful, their high-efficiency thin-film CdTe panels will be used for those projects.

Further expansion

Backed by a solid financial forecast and a potentially lucrative new business model, First Solar has will also this year branch out into polysilicon panel production. In April the company purchased the TetraSun unit, and has a pilot factory in Malaysia capable of producing 100 MW of panels per year – an output that has already sold through Q1 2015.

The company hopes to boost sales by cutting development costs from $1.59/W currently to below $1/W by 2017. To do so, First Solar will press forward with the development of its high-efficiency CdTe panels, which in testing reached efficiencies of 17%. Currently, its panels on the market manage a conversion rate of 13.4%.

Panel production is also forecast to increase to 1.9 GW globally, up from 1.6 GW in 2013. By 2018, the company is eyeing a production capacity of 4.3 GW, with many old production lines due to be restarted over the next few years, as well as the creation of new ones.

In the U.S., First Solar has 3.7 GW of solar PV projects in the planning stages, all due for completion before 2017, according to the 2013 annual report. Farther ahead, the company has identified 10.66 GW of potential PV bookings, of which 5.9 GW could be developed outside of the U.S. market.

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