First Solar (FSLR) Stock Down on Earnings, GE & Element Power Deals
Shares of First Solar Inc. (FSLR) traded down -4.46 or -9.54 percent in pre-market trading on Wednesday, after the company reported its second quarter earnings for fiscal 2013. Quarterly adjusted earnings for the company came to $0.39 per share on revenues of $519.76 million. The solar panel manufacturer had made $1.27 per share on revenues of $957.33 million in the second quarter of 2012. Analysts called for earnings of $0.52 on revenues of $721.08 million.
GAAP earnings were $0.37 per share that included a restructuring charge of $0.02. In addition to the disappointing earnings news, First Solar announced it was buying General Electric's (GE
) thin film solar panel technology in exchange for 1.75 million First Solar shares. The company also announced it was acquiring a 1.5 GW pipeline of United States and Mexico assets from Element Power. Daily Chart
Founded in 1990, Tempe, Arizona based First Solar Inc. is the world's second largest producer of photovoltaic (PV) solar panels. First Solar uses cadmium telluride or CdTe as a semiconductor, producing solar panels far more efficiently and at a lower cost than with crystalline silicon. The deal with GE will have First Solar acquire GE's thin film panel technology, which has had good results in the laboratory but has yet to be manufactured on a large scale. In exchange for GE's technology, GE will get 1.75 million shares of First Solar, amounting to about two percent of the company's stock outstanding. The two companies hope that by pooling their resources a more efficient solar panel can be produced. GE's thin film panels set a record for efficiency at the National Renewable Energy Lab in Golden, Colorado earlier this year. First Solar CEO James A. Hughes stated in a conference call after the earnings release that, "having a company of GE stature invest and partner with us is a tremendous validation that cad tell solar technology and First Solar's manufacturing expertise and we are excited about the potential benefits this will mean for the future development of our technology and the prospects for our business." In addition to earnings and the deal with GE, First Solar also announced that it was acquiring a 1.5 GW pipeline of development assets in the U.S. and Mexico from Element Power. The pipeline includes projects in Arizona, California, Colorado, Georgia, Illinois, Louisiana, North Carolina and Texas, as well as in the State of Sonora, Mexico. Tim Rebhorn, First Solar's Senior Vice President of Business Development for the Americas stated that, "The Mexican project pipeline strategically positions First Solar for our entry into the market. We are excited by the opportunity to explore new relationships with CFE (Comision Federal de Electricidad) and with commercial and industrial customers and the Mexican government, and to establish a strong initial presence in the region." While First Solar stock is under pressure because of disappointing earnings, the company's new ventures may provide additional revenue in future quarters. First Solar has been resilient in the solar market and has adapted to changes, which could be an opportunity to invest. Other News About FSLR First Solar Sees Australian Project Decision Within 12 Months
Australian government to decide on increasing the size of the country's largest solar development. First Solar's Q2 2013 Earnings Call Transcript
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Published on Aug 7, 2013
By Jay Hawk