First Solar, Inc.
CEO : Mr. Mark R. Widmar
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 10.5% YoY | -126.6% | -105.6% | 2023-02-28 |
Mark Widmar says,
Record Bookings and Backlog
- Record volume of multi-gigawatt deals spanning multiple years was driven by competitive pricing, technology, agile contracting, shared values, and trust in the ability to deliver.
- Record 48.3 gigawatts of net bookings in 2022, with a total backlog of future deliveries standing at a record 67.7 gigawatts.
- Momentum driven by points of differentiation, including unique CadTel technology, vertically integrated manufacturing process, domestic production, strong balance sheet and commitment to responsible solar.
Manufacturing Expansion and Investment
- Produced a record 9.1 gigawatts in 2022, with 50th gigawatts produced since commercial production began in 2002.
- Increased top production bin from 465 watts in 2021 to 475 watts in 2022.
- Commenced initial production at the next-generation Series 7 factory in Ohio, which will continue to ramp through 2023 and announced a new 3.5-gigawatt Series 7 factory in Alabama.
- Announced an additional investment and a dedicated $270 million research and development facility in Ohio.
Financial Position and Guidance
- Full year EPS results came in towards the high end of the guidance range provided at the time of the third quarter earnings call.
- Gross cash of $2.6 billion, or $2.4 billion net of debt, which is an increase to gross and net cash of $800 million versus the prior year.
- Largely exited the legacy systems business in 2022, enabling the focus on greatest technology and competitive advantages.
- Continuing to evaluate opportunities for further investments in incremental manufacturing capacity.
Shift in Procurement Behavior
- Seeing a perceptible shift in procurement behavior as evidenced by the volume of multiyear, multi-gigawatt orders placed by customers.
- Large developers placing orders for at least 2 gigawatts, with many of these transactions with repeat buyers.
- Future expected shipments, which now extend into 2029, are 67.7 gigawatts. Excluding India, and including year-to-date bookings, sold out through 2025.
- Pivoted from negotiating solely for 2026 volume to work with customers who are looking to secure multiyear contracts over the remainder of the decade, resulting in an increase of 12.3 gigawatts in planned deliveries in 2026 and beyond.
Alex Bradley says,
Net Sales
- Net sales in Q4 2022 were $1 billion, an increase of $0.4 billion compared to the prior quarter.
- Module segment net sales were $846 million, an increase of $226 million from the prior period.
Gross Margin
- Gross margin was 6% in Q4 2022 compared to 3% in Q3 2022, primarily due to lower module and freight costs.
- For the full year 2022, gross margin was 3% compared to 25% in the prior year.
Operating Expenses
- SG&A, R&D, and production start-up expenses totaled $107 million in Q4 2022, an increase of approximately $11 million relative to the prior quarter.
- Fourth quarter operating loss was $46 million, which included depreciation and amortization of $71 million, production start-up expense of $33 million, and share-based compensation expense of $8 million.
Cash Flow and Net Cash Position
- The aggregate balance of cash, cash equivalents, restricted cash, restricted cash equivalents, and marketable securities was $2.6 billion at the end of 2022, an increase of $0.7 billion from the prior quarter and $0.8 billion from the prior year.
- Year-end net cash position was $2.4 billion, an increase of $0.7 billion from the prior quarter and $0.8 billion from the prior year.
- Cash flows from operations were $873 million in 2022, compared to $238 million in 2021.
Other Income and Expense
- The project’s lenders forgave a portion of the outstanding loan balance, which resulted in a gain of $30 million recorded within other income.
- Interest income in Q4 2022 was $18 million, an increase of $8 million compared to the prior quarter.
Q & A sessions,
Manufacturing Capacity Growth
- On track to add 6.2 GW of global nameplate manufacturing capacity in 2023 with new Series 7 factories coming online in the US and India
- Expect to exit 2023 with 16 GW of annual nameplate capacity
Advanced Manufacturing Production Tax Credits
- Expecting to benefit from advanced manufacturing production tax credits provided under Section 45X of the Inflation Reduction Act
- Guidance is expected to entitle integrated tax credits for wafers, cells, and module assembly, which is estimated to equal approximately $0.17 per watt for modules produced in the US and sold to a third-party
Bookings and ASP
- Bookings opportunities of 93.1 GW remain robust with 58 GW in mid to late-stage customer engagement
- Contracted backlog revenue is a little less than $18 billion as of the end of the year with an implied ASP of $0.288
- Booked 12 GW since the last earnings call with an ASP of $0.308
- The average ASP for the bookings in Q1 2023 is higher than the ASP for the bookings since the last earnings call
Domestic Content
- Expecting incremental ASP uplift for domestic production that is estimated to be around $0.03 to $0.04
- Aggressively talking 2024 and 2025 with customers to get incremental ASP uplift for domestic production
Global Policy Environment
- Policymakers in the US and leading democracies abroad are serious about tackling the unhealthy overconcentration of solar supply chains in China and are supportive of solar technologies that can be scaled in a sustainable manner for both people and the planet
No bad stock 