01—Abstract
Summary
Summary of the 10-K filed February 21, 2020. Cited figures are marked; the original filing is the authoritative source.
First Solar, Inc. (FSLR) filed its 10-K for the fiscal year ending December 31, 2019, on February 21, 2020.
The company operates as a global provider of comprehensive PV solar energy solutions, focusing on designing, manufacturing, and selling thin-film PV solar modules and developing PV solar power systems. The report highlights First Solar's advanced thin-film CdTe module technology, particularly its Series 6 modules, which offer advantages in energy yield, temperature coefficient, and shading response compared to traditional crystalline silicon modules. Financially, 2019 saw a significant increase in net sales to $3.1 billiona, up 36% from $2.2 billion in 2018, driven by higher third-party module sales and project completions.
Despite this revenue growth, the company reported a net loss of $114.9 millionb for 2019, a reversal from a net income of $144.3 million in 2018, largely impacted by a substantial litigation loss provision. The company continues to invest in R&D and manufacturing capacity expansion, including the commercial production of Series 6 modules at new facilities in Vietnam and Ohio. Key strategic initiatives include exploring options for its U.S. project development business and focusing on markets where solar power offers a cost-competitive solution.
The company also faces significant industry challenges, including intense pricing competition and potential supply-demand imbalances in the PV module market. First Solar emphasizes its differentiated technology, manufacturing process, financial viability, and sustainability advantages as key competitive strengths.
02—Key points
Key Highlights
- Net sales increased significantly by 36% to $3.1 billion in 2019, driven by higher module sales and project completions.
- The company reported a net loss of $114.9 million in 2019, a reversal from a net income of $144.3 million in 2018, primarily due to a significant litigation loss provision.
- First Solar commenced commercial production of its Series 6 modules at new facilities in Vietnam and Ohio, increasing total installed Series 6 capacity to 5.5 GWDC.
- The company is exploring strategic options for its U.S. project development business, potentially leading to a partnership or sale.
- First Solar's advanced thin-film CdTe module technology (Series 6) offers competitive advantages in energy yield and performance.
- The company continues to invest in R&D to improve module efficiency and reduce manufacturing costs, positioning itself against intense industry competition.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2019, First Solar, Inc. lost $0.04.
- Revenue$3.06B100.0%
- Cost of revenue−$2.51B82.1%
- Gross profit$549.2M17.9%
- Operating costs−$711.0M23.2%
- Operating income−$161.8M5.3%
- Interest, other & tax$46.9M1.5%
- Net income−$114.9M3.8%
04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 21, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $3.06B$2.24B | +36.5% |
| Cost of Revenue | $2.51B$1.85B | +35.7% |
| Gross Profit | $549.21M$392.18M | +40.0% |
| R&D Expenses | $96.61M$84.47M | +14.4% |
| SG&A Expenses | $205.47M$176.86M | +16.2% |
| Operating Expenses | $711.00M$352.06M | +102.0% |
| Operating Income | -$161.78M$40.11M | −503.3% |
| Interest Expense | $27.07M$25.92M | +4.4% |
| Net Income | -$114.93M$144.33M | −179.6% |
| EPS (Basic) | $-1.09$1.38 | −179.0% |
| EPS (Diluted) | $-1.09$1.36 | −180.1% |
| Shares Outstanding (Basic) | 105.31M104.75M | +0.5% |
| Shares Outstanding (Diluted) | 105.31M106.11M | −0.8% |
05—Questions
Frequently Asked Questions
What was First Solar's financial performance in 2019?
In 2019, First Solar reported a net sales increase of 36% to $3.1 billion, primarily driven by higher third-party module sales and project completions. However, the company incurred a net loss of $114.9 million, a significant shift from a net income of $144.3 million in 2018. This loss was largely influenced by a substantial litigation loss provision of $363 million.
What are First Solar's key technological advantages?
First Solar's core advantage lies in its advanced thin-film CdTe semiconductor technology, particularly its Series 6 module technology. These modules offer superior energy yield in real-world conditions compared to crystalline silicon modules, better performance in high temperatures and humid environments, and improved shading response. The company also highlights its high-throughput, automated manufacturing process.
What are the main challenges facing First Solar in the market?
First Solar operates in a highly competitive market characterized by intense pricing pressure, both at the module and system levels. The company faces the risk of global supply exceeding demand, which can lead to further price reductions. Additionally, evolving crystalline silicon technologies, such as PERC and bifacial modules, present ongoing competitive challenges.
What strategic initiatives are First Solar pursuing?
First Solar is focusing on key geographic markets where solar energy is a cost-effective solution, particularly for utility-scale power plants. The company is also strategically expanding its manufacturing capacity for its Series 6 modules. Notably, First Solar is evaluating strategic options for its U.S. project development business, which may include a partnership or sale.
06—Continue