First Solar Earnings Signal Industry Troubles

Solar systems manufacturer First Solar Inc. (NASDAQ:FSLR) Thursday reported disappointing results for the first three months of 2012, spurring a sell-off that has continued into pre-market trading today. The Tempe, Arizona-based company posted an adjusted net loss of 8 cents per share during the first quarter as revenue fell about 12 percent.

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Net sales were $497 million for the period — down $163 million from the last quarter of 2011, and $70 million year-over-year — as prices throughout the industry continued to plummet. Taking restructuring costs into account, First Solar saw a net loss of $449 million or $5.20 per fully diluted share. Cash and marketable securities were $750 million, down from $788 million at the end of the fourth quarter of 2011.

Analysts polled by Thomson Reuters had forecast earnings of 59 cents per share on revenue of $688 million. First Solar had been one of the top players in the photovoltaic industry, but steadily falling prices and a worldwide glut of solar panels have caused it to falter. The company recently announced plans to close its German factory, trim production at its facility in Malaysia, and cut nearly one third of its employees.

The company slashed its 2012 full-year revenue outlook in February, but reports it is raising guidance for the year based on reductions in its “ongoing cost structure related to our restructuring initiatives.” It is increasing earnings per fully diluted share guidance — excluding restructuring charges and costs “in excess of normal warranty expenses” — to $4-$4.50, compared to previous guidance of $3.75-$4.25. Operating cash flow guidance was upped to $850-$950 million, compared to prior guidance of $800-$900 million.

First Solar also yesterday named its chief commercial officer James Hughes as the company’s new chief executive. Hughes just joined the company in March, having previously served as chief executive of energy company AEI.

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