What Downturn? Thin-Film Behemoth First Solar Charges Ahead


Solar firms have been hit as hard as anyone in the economic downturn as companies and residents have shied away from large purchases like rooftop and backyard solar panel installations. But First Solar (s FSLR), the stock market darling that is the leader in the thin-film solar space, keeps signing new solar deals with little evidence of the struggle that surrounds it. To put an exclamation on that, this afternoon First Solar announced it has tripled its profit for the first quarter of the year. Is the thin-film behemoth untouchable? Well, precisely because of its market position — it is the biggest thin-film solar maker — its lead and large market share allow it to scoop up all of the thin-film solar deals out there while competitors fall behind.

Both sales and profits were way up in the most recent quarter. Net income rose to $164.60 million, up from $46.62 million for the first quarter of 2008, while net sales jumped to $418.21 million from $196.92 million from the same quarter a year ago. Earnings per share of $1.99 beat analyst expectations and shares rose over 6 percent in after-hours trading.

Through all the general worries about the solar market during the first three months of the year, First Solar was a constant bright spot. Last month, First Solar said it had hit the milestone of having produced 1 GW of thin-film solar modules since it started commercial production back in 2002. A month before that First Solar said it was snapping up a coveted 550 MW solar project to supply PG&E (s PCG) with solar power for $400 million from down-and-out OptiSolar. And back in December, First Solar was reported to have reached elusive grid parity, or the point where photovoltaic electricity is as cheap as conventional electric power. If you’re a utility or large company with a lot of roofs and you want to buy thin-film solar, First Solar’s basically the only game in town.

One modest note of uncertainty, which First Solar announced in conjunction with its earnings: The company is looking for a new CEO to replace current CEO Michael Ahearn, and is conducting an industry-wide search. Ahearn says he isn’t being pushed out but will remain with the company as executive chairman.


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