First Solar Heats Back Up On Profit Jump


firstsolargraphic1.jpgThin-film solar stock darling First Solar has officially recovered from its New Year’s hangover. On Wednesday, the Phoenix-based company said its fourth-quarter profit grew to $62.9 million, up from $8.04 million a year earlier. Dang, that’s a nearly eightfold rise. That was also on strong sales of $200.8 million, up from $52.7 million for the year earlier. Full-year results were even better, with net income coming in at $158.4 million vs. $3.98 million the year before.

First Solar needed a strong showing, and Wall Street responded. The company’s stock jumped almost 25 percent in morning trading, getting close to $220. It was trading under $190 just a month ago, at one point dropping as low as $150 amid fears of the industry losing an investment tax credit, the general macroeconomic slowdown and concerns that First Solar shares had simply been rising too fast (they had been changing hands for $275 around Christmastime).

But First Solar’s hot earnings are assuring investors that, yes, the company is currently as strong as everyone’s expected it would be. CEO Michael Ahearn said the company is now benefiting from the full capacity of its plant in Frankfurt/Oder Germany. Bloomberg quotes CFO Jens Meyerhoff as saying that First Solar plans to double production to between 400 and 430 megawatts this year from 207 megawatts last year, with help, in part, from new factories it’s building in Malaysia.

Unlike more traditional solar makers that use silicon, First Solar uses cadmium telluride, so the company has been able to avoid the tight silicon supply chain that’s affecting solar makers worldwide. High demand and tight supply has thrown higher costs at traditional silicon solar makers — and helped drive their stock prices down. While cadmium telluride supplies have issues of their own, for now, the sun is back out for First Solar.



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