Diving Into First Solar Executive Earnings Insights

On Thursday, First Solar, Inc. (NASDAQ:FSLR) reported its first quarter earnings and discussed the following topics in its earnings conference call. Here’s what the C-suite revealed.

Five-Year Plan

Mahavir Sanghavi – UBS Securities: This is Mahavir Sanghavi for Stephen Chin. A quick question about five-year plan. Your next five-year plan assumes about additional 5 gigawatts of project pipeline. Can you give us some sense of what investment is required for that and what the geographical breakdown could broadly look like?

James A. Hughes – CEO: We didn’t have a pipeline assumption really on the five-year plan. What we assumed – what we’re targeting is as a baseline anyway for the full year 2016 annual installations of 3 gigawatts. And the way we got to that was simply to try to take our existing production capacity, including the spare, tools, and maximize that. There are a lot of unknowns here. If things break in a more favorable way, it will be larger, but we have to have a baseline to try to size resources, financially and otherwise too. As far as the capital to executed, a lot of that is going to depend on the model, the partnering arrangements and what role we play in some of these markets, which is a reason to continue to bolster our liquidity and our cash position as we execute through these projects.

A Closer Look: First Solar Earnings Cheat Sheet>>

Mark Widmar – CFO and CAO: Yeah, we did say it has a range of understanding the capital requirements, putting aside the capital that we may need to make in order to create various relationships and alliances in different markets, is that the capital expenditures would be in the range of $150 million to $300 million on an annual basis, which the way I would look at that is on the front end of the curve it’s going to be lower and then on the back end of the curve it’s going to be closer to 2016 or see it ramp up a little bit.

JV Partnership

Sanjay Shrestha – Lazard Capital: A two-part question for you guys. First, are you guys in sort of active discussion right now, Mike, when you talk about the JV partnership as a way to sort of go after some of these sustainable markets? And second part, if I may, can you update us on some of that 4,000 remaining warranty claims, are they completely behind us or what’s the status of that?

Michael J. Ahearn – Founder and Chairman: Let me ask Jim, he used to comment on the partnerships and then Mark can update you on the claims, Sanjay?

James A. Hughes – CEO: Sure, its – I don’t want to highlight the specific markets in which we have conversations for competitive reasons, but we have multiple joint venture conversations underway. We actually are currently bidding in a number of markets with partners, we’re discussing longer-term broader arrangements with other partners, but we think it will be a regular feature of the business model as we move into these new markets and we have numerous conversations underway. So, we are – we have boots on the ground and are in advanced discussions with the number of parties.

Mark Widmar – CFO and CAO: Yes. As it relates to the (indiscernible) claims, as I indicated we have now processed all of the claims. We’ve determined which ones would require remediation and we have provided for those claims. We believe that the evaluation that we’ve done – that we have completed has been very thorough and we do not believe that meaningful amount if any of those unremediated claims would then determine to be (wired) after requiring remediation.

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