Summary
First Solar, Inc. reported largely stable net sales of $532.1 million for the first quarter of 2020, comparable to the $532.0 million in the prior year period. The company achieved a significant turnaround in profitability, with gross profit increasing to $90.3 million (17.0% of net sales) from a negligible $112 in the prior year quarter. This improvement was driven by higher gross profits on third-party module sales and better manufacturing facility utilization due to the successful ramp-up of Series 6 module production lines. Net income for the quarter was $90.7 million, a substantial increase from a net loss of $67.6 million in Q1 2019, with diluted EPS of $0.85. The company's strong financial performance in the quarter was bolstered by a significant discrete tax benefit related to the CARES Act. Despite the improved profitability, the company's operating cash flow turned negative, showing a net cash used of $504.9 million, a substantial increase from $303.4 million in Q1 2019. This was largely due to a $350 million settlement payment for a class action lawsuit. The company ended the quarter with $929.4 million in cash and cash equivalents, a decrease from $1.35 billion at the end of 2019, reflecting the lawsuit settlement and other working capital changes. First Solar continues to navigate a competitive market characterized by pricing pressure, though its technology and cost structure remain competitive advantages.
Financial Highlights
53 data points| Revenue | $532.12M |
| Cost of Revenue | $441.79M |
| Gross Profit | $90.34M |
| R&D Expenses | $25.61M |
| SG&A Expenses | $58.59M |
| Operating Expenses | $88.68M |
| Operating Income | $1.66M |
| Interest Expense | $6.79M |
| Net Income | $90.70M |
| EPS (Basic) | $0.86 |
| EPS (Diluted) | $0.85 |
| Shares Outstanding (Basic) | 105.59M |
| Shares Outstanding (Diluted) | 106.39M |
Key Highlights
- 1Net sales remained stable at $532.1 million, with a significant shift in segment performance: modules segment sales increased by 98% while systems segment sales decreased by 58%.
- 2Gross profit dramatically improved to $90.3 million (17.0% of net sales) from $0.1 million (0.0% of net sales) in the prior year, driven by higher module sales profitability and improved manufacturing utilization.
- 3Net income turned positive at $90.7 million ($0.85 diluted EPS), a significant rebound from a net loss of $67.6 million ($0.64 diluted EPS) in Q1 2019.
- 4Operating cash flow significantly worsened, with net cash used increasing to $504.9 million from $303.4 million, largely due to a $350 million settlement payment for a class action lawsuit.
- 5Cash and cash equivalents decreased to $929.4 million from $1.35 billion year-over-year, primarily impacted by the lawsuit settlement and other working capital needs.
- 6Research and development expenses increased by 17% to $25.6 million, reflecting continued investment in technology improvements.
- 7The company is actively managing its module manufacturing capacity, with Series 6 production increasing and plans to transition legacy facilities.