First Solar Records Biggest-Ever Loss In Q4 & 2016
US-based solar PV manufacturer First Solar, reporting its fourth quarter and full-year 2016 results, reported its biggest-ever quarterly loss, as well as a massive net loss for the whole year, on the back of decreased revenue and a massive overhauling of the company.
In November of 2016 First Solar reported poor quarterly earnings, with net sales down nearly $250 million on the previous quarter. As a result, the company slashed its full-year guidance. A fortnight later, the company was forced to not only revise its full-year guidance down again, but was forced to announce job cuts of up to 1,600. The whole overhaul was intended to streamline the company’s manufacturing — specifically focusing all its efforts on the production of its Series 6 solar panels.
Fast forward to Tuesday, and the leading US solar manufacturer reported net sales for the fourth quarter were down again. This is a poor sign for the company, which has so far reported Q3’16 sales down $246 million on Q2’16 to sit at $688 million on Q3’16, which was itself down 84% on Q3’15, only to see net sales drop further to $480 million in Q4’16. First Solar attributed the fourth quarter slump to “the completion of multiple systems projects during the quarter, partially offset by higher module-only sales.”
As such, First Solar reported a net loss per share of $6.92 for Q4’16, compared to a measly earnings per share of $1.63 in Q3’16. According to First Solar, “The fourth quarter was impacted by pre-tax charges of $729 million, primarily related to previously announced restructuring actions.”
Net sales for the full-year 2016 were just under $3 billion ($2.95 billion), a 17% decrease on the previous year.
However, the big news was the net loss posted by the company for the fourth quarter and full-year 2016. Operating loss for the fourth quarter sat at $765 million, massively down from a minor profit in the third quarter of $88 million. Operating loss for the full-year 2016 was $502 million, down from a net profit in 2015 of $516 million.
Nevertheless, the company’s executives remained upbeat in their comments to shareholders.
“Despite the difficult restructuring decisions that we undertook in the fourth quarter, we ended the year with strong operational results,” said Mark Widmar, CEO of First Solar. “Our best line exited the quarter running above 16.9% conversion efficiency, and for the full year our fleet averaged 16.4% efficiency, an 80 basis point improvement over the prior year. From a financial perspective we delivered full year non-GAAP earnings per share of $5.17, exceeding our guidance for the year. We ended the year with $1.8 billion of net cash and are well positioned as we move forward with our Series 6 transition.”
And it seems that the company’s expectations for the year ahead have soothed investor fears, with the company shares increasing 5%. Specifically, First Solar increased its net sales expectations to between $2.8 billion to $2.9 billion. The company expects earnings per share to be between $-0.80 to $-0.05. Overall, most of the company’s metrics for the year ahead were downgraded.
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