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New York Equity Market Rallies Around First Solar
Green Technology Featured Articles
April 10, 2013

New York Equity Market Rallies Around First Solar

By Cheryl Kaften
TMCnet Contributor

First Solar (FSLR) may have put together the best “playbook” in the industry. In a flurry of announcements on April 9th  and 10th , the Arizona-based thin-film manufacturer disclosed some gutsy tactical maneuvers geared to block the competition while driving its own momentum.  


In a rapid-fire sequence, the company revealed that it had:

  • Adopted an accounting change that would support a robust revenue outlook for 2013
  • Added to its growing U.S. project list
  • Made an acquisition that offers access to the Japanese market
  • Realized another breakthrough in solar cell conversion efficiency

At the NASDAQ closing bell in New York on Tuesday, the company’s shares were up by 45 percent, at $39.35. Shares of other solar stocks, including Yingli Green Energy and Sunpower, also rallied on the news.

 Topping Off’ the Bottom Line

 The week started off on an unexpectedly promising note. At the 2013 Analysts Meeting on April 9, First Solar revealed its decision to recognize revenue sooner rather than later—boosting its income outlook and the company’s guidance for the rest of the year. The company noted that revenue recognition for the 550MW Desert Sunlight (News - Alert) project in California currently is expected to begin in the second half of 2013 and conclude by late 2014. This assumption is reflected in the First Solar’s 2013 guidance and 2014 outlook.

For the current 12-month period, First Solar projected net sales between $3.8 billion and $4.0 billion, including about $3.6 billion in system sales. Total module shipments have been pegged at between 1.6 gigawatts (GW) and 1.8GW. Diluted earnings per share are expected to yield between $4.00 and $4.50; and in an industry where razor-thin margins have been the rule, the company’s consolidated gross margin is anticipated to be between 20 percent and 22 percent.

According to industry analysts, this guidance was well above forecasts. That expectation according to Thomson Reuters included earnings of $3.51 per share on revenue of $3.1 billion for 2013.

First Solar also gave optimistic guidance for 2014 and 2015, with gains each year in module shipments, net sales, earnings per fully diluted share, and operating cash flow.

A Project List of Greater Proportions

A short time later, the company confirmed that its project list is growing longer, with the acquisition of the 60-megawatt (MW) North Star solar project, which NorthLight has developed in Fresno County, California.

The photovoltaic (PV) solar plant is expected to start construction in 2014 and to reach completion in 2015. When fully operational, the plant will produce enough clean, renewable energy to power over 21,000 average California homes while displacing approximately 33,000 metric tons of water consumption and 39,000 metric tons of CO2 per year. Pacific Gas &Electric already has signed on to a 20-year power purchase agreement.

NorthLight is a joint venture of Renewable Energy Corporation ASA and Summit Power Group, LLC. Terms of the transaction were not disclosed

"We're excited to be acquiring and constructing our first utility-scale photovoltaic power project in Fresno County," said James F. Cook, First Solar’s director of Project Development. "North Star will provide much-needed construction employment in a hard-hit economy, while helping the state satisfy its renewable energy requirements."

 A Trifecta of Wins

And before the day had ended, First Solar revealed that it will purchase San Jose, Calif.-based TetraSun from Tokyo-based JX Nippon Oil and Energy (JX Energy) and other investors—providing the thin-film company with a trifecta of business wins: an entrée into the dynamic Japanese market, a new technology to sell, and the opportunity to move into rooftop installations.

TetraSun is a solar photovoltaic (PV) technology startup that has developed a breakthrough cell architecture capable of conversion efficiencies exceeding 21 percent, with commercial-scale manufacturing costs comparable to conventional multicrystalline silicon solar cells.

Terms of the transaction, which is expected to close in the second quarter of 2013, were not disclosed.  First Solar tentatively plans to begin commercial-scale manufacturing of the new technology in the second half of 2014.

"This [leading-edge] technology will unlock the half of the PV market which favors high-efficiency solutions, which has been unserved by First Solar to date," said Jim Hughes (News - Alert), CEO of First Solar. "This new capability to meet the needs of customers with distributed generation applications, coupled with our leading CadTel offering—which remains the benchmark for utility-scale systems—gives us a unique end-to-end suite of solutions to serve the full spectrum of commercial applications."

Hughes added, ""JX Nippon Oil & Energy was among the first to recognize the potential of this technology, and we are very pleased to continue working with this leading energy company to bring this product to market. Japan is an important market with unique energy challenges, and we believe this new technology is well-suited to help them meet their energy needs."

Sales Partnership

Finally, on April 10, Bloomberg (News - Alert) reported that JX Energy is in talks with First Solar that to distribute the American solar panel manufacturer’s products in Japan. JX Energy is seeking exclusive sales rights for First Solar’s photovoltaic panels using technology developed by TetraSun, the company said in a statement.

 “JX Energy decided to sell its stake in TetraSun because of First Solar’s capability to mass-produce. What we need is to start high-volume production as soon as possible, and First Solar is the most capable and appropriate company to do that,” explained Hiroya Nishijima, a senior vice president of JX Energy, at a press briefing in Tokyo.

In final trading on April 10, First Solar’s share price was still going strong, despite a poor 4Q2012 earnings report from Shangrao, China-based JinkoSolar. First Solar fell by just 7.70 percent in daily trading, with an end position of $36.72—leaving the shares 39.2 percent higher than they had been a week earlier.




Edited by Jamie Epstein


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