Summary
First Solar, Inc. (FSLR) reported its third-quarter and nine-month results for 2011, demonstrating robust revenue growth driven significantly by its systems business, which saw a 77% increase in the third quarter and a 44% increase year-to-date. Overall net sales grew by 26% in the third quarter and 8% for the nine-month period. Despite increased sales, the company experienced a decline in gross profit margin due to a 6% decrease in module average selling price (ASP) in Q3 and a 14% decrease for the nine months, largely attributed to competitive pressures and a shift in geographic sales mix. Significant investments in research and development were made, increasing by 78% in the third quarter, aimed at improving module efficiency and manufacturing processes. The company also reported a substantial increase in production start-up expenses, reflecting ongoing manufacturing capacity expansions in various international locations. Cash flow from operations turned negative for the nine-month period, primarily due to increased payments to suppliers and a decrease in cash received from customers, alongside significant capital expenditures for plant expansions.
Financial Highlights
56 data points| Revenue | $1.01B |
| Cost of Revenue | $626.62M |
| Gross Profit | $379.16M |
| R&D Expenses | $38.16M |
| SG&A Expenses | $112.74M |
| Operating Expenses | $156.42M |
| Operating Income | $222.74M |
| Interest Expense | $0 |
| Net Income | $196.51M |
| EPS (Basic) | $2.28 |
| EPS (Diluted) | $2.25 |
| Shares Outstanding (Basic) | 86.34M |
| Shares Outstanding (Diluted) | 87.15M |
Key Highlights
- 1Net sales increased by 26% year-over-year for the third quarter of 2011, reaching $1,005.8 million, and by 8% for the first nine months to $2,105.9 million.
- 2The systems business showed substantial growth, with revenue up 77% in Q3 and 44% year-to-date, indicating successful expansion in providing complete solar power systems.
- 3Gross profit margin decreased from 40.3% to 37.7% for the third quarter and from 45.5% to 39.6% for the nine-month period, primarily due to a decline in module average selling prices (ASP).
- 4Module ASPs decreased by 6% in Q3 and 14% year-to-date, driven by competitive market conditions and a shift in geographic sales mix.
- 5Research and development expenses increased significantly by 78% in Q3 and 53% year-to-date, reflecting continued investment in technological advancement and efficiency improvements.
- 6Cash used in operating activities for the nine months ended September 30, 2011 was $44.2 million, a significant shift from the $355.7 million cash provided in the same period last year, primarily due to increased payments to suppliers and lower cash received from customers.
- 7The company continued to expand its manufacturing capacity, leading to a substantial increase in production start-up expenses and capital expenditures for plant expansions in Germany, Malaysia, and the US.