First Solar shares fall as production woes weigh on results

SHARES of First Solar Inc fell after the US solar company reported a surprise quarterly loss and lower-than-expected revenue due to production challenges in its next-generation panel technology.

The company also lowered its gross margin forecast for the year, but stood by its earnings outlook.

First Solar lost US$48.5 million, or 46 cents per share, during the second quarter, compared with earnings of US$51.9 million, or 50 cents per share, in the same period a year ago. Wall Street analysts had been expecting earnings of 2 cents a share, according to Thomson Reuters.

Revenue was US$309 million, far lower than analysts’ average forecast of US$503.1 million.

First Solar has been moving to ramp up manufacturing of its socalled Series 6 panels at factories in Ohio, Malaysia and Vietnam. The impact of production challenges is expected to be short term, executives said on a conference call with analysts.

First Solar has benefited from having a technology that is not subject to the 30 per cent tariffs imposed by President Donald Trump on solar imports earlier this year. Its panels are made from cadmium telluride, while the tariffs apply only to traditional silicon solar products.

The company’s Series 6 product, which is low in cost and more efficient at generating power than its previous products, will be a competitive advantage in the industry, Chief Executive Mark Widmar said on the conference call.

He said changes to China’s solar incentive policies had caused “an almost immediate collapse in pricing across the crystalline silicon supply chain” that would lead to greater industry competition but lower solar power prices for customers. — Reuters