First Solar Profit Nearly Triples

By Maria Armental 

First Solar Inc.'s profit nearly tripled in the fourth quarter as the solar-products maker reported higher revenues from the sale of a key project.

In the current quarter, First Solar projects a loss of 25 cents to 35 cents a share on sales of $550 million to $650 million, compared with the consensus of a profit of 80 cents a share on revenue of $924 million.

Shares fell 1% to $54.37 in recent after-hours trading.

First solar said results are projected below prior quarters as it keeps completed projects on its balance sheet--rather than sell them-- while it considers forming a joint "yieldco" with rival solar-panel maker SunPower Corp.

Similar to real-estate investment trusts (REITs) and master limited partnerships (MLPs), yield companies, known on Wall Street as "yieldcos, " are publicly traded companies that hold power plants and issue regular dividends to shareholders.

Tempe, Ariz.-based First Solar has been expanding internationally to soften the expected impact of a slowdown in installations in the U.S. In the third quarter, about 42% of its bookings came from outside the U.S.

A 30% tax credit on solar systems is scheduled to drop to 10% in 2017.

First Solar is also venturing into the residential market investing in community-solar provider Clean Energy Collective.

Unlike the burgeoning rooftop market, community solar, uses ground-mounted systems.

First Solar also announced this month plans with Apple Inc. to build a 2,900-acre solar farm in Monterey County, Calif., that will produce enough electricity to power all of Apple's offices and stores in the state, including its new headquarters under construction in Cupertino. Construction is expected to be completed by the end of 2016.

Overall, First Solar reported net income of $192 million, or $1.89 a share, up from $65.3 million, or 64 cents a share, a year earlier.

Revenue jumped 31% to $1.01 billion.

Analysts surveyed by Thomson Reuters expected 76 cents a share on $1.28 billion in revenue.

Gross margin improved to $30.6% from 24.6%.

Bookings through the end of the year were 2.5 gigawatts of solar capacity. So far this year, First Solar reported 311 megawatts in bookings.

One gigawatt, or 1,000 megawatts--roughly the amount produced by an average nuclear reactor--can power 216,000 homes in California and 155,000 in New York, according to the Solar Energy Industry Association. Weather and other factors can affect a system's energy production.

Through Tuesday's close, First Solar's stock had fallen 5% over the past 12 months.

Write to Maria Armental at [e-mail]

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