Summary
First Solar, Inc. reported net sales of $620.96 million for the second quarter of 2022, a slight decrease of 1% compared to the same period in the prior year. This decrease was primarily attributed to a prior period settlement of an indemnification arrangement and a lower average selling price per watt, partially offset by an increase in module sales volume. The company experienced a gross loss of $23.2 million in Q2 2022, a significant decline from a gross profit of $174.1 million in Q2 2021. This was largely due to reduced average selling prices, an impairment loss on the Luz del Norte PV solar power plant, and increased sales freight costs. The company did, however, recognize a substantial gain of $245.4 million from the sale of its Japan project development business, which significantly boosted operating income. Operationally, First Solar produced 2.2 GWDC of solar modules in Q2 2022, a 12% increase year-over-year, driven by higher manufacturing throughput. The company continues to expand its production capacity with new facilities planned in the U.S. and India. Despite the challenges in gross margin, the company maintained a strong cash and marketable securities position of $1.8 billion as of June 30, 2022, and expects to have sufficient liquidity to meet its needs for the next 12 months. The strategic sale of non-core assets and ongoing capacity expansion signal a focus on core module manufacturing operations.
Financial Highlights
55 data points| Revenue | $620.96M |
| Cost of Revenue | $644.15M |
| Gross Profit | -$23.20M |
| R&D Expenses | $25.23M |
| SG&A Expenses | $38.89M |
| Operating Expenses | $77.35M |
| Operating Income | $144.83M |
| Interest Expense | $3.24M |
| Net Income | $55.80M |
| EPS (Basic) | $0.52 |
| EPS (Diluted) | $0.52 |
| Shares Outstanding (Basic) | 106.59M |
| Shares Outstanding (Diluted) | 107.06M |
Key Highlights
- 1Net sales for Q2 2022 were $620.96 million, down 1% year-over-year, impacted by lower average selling prices and a prior period indemnification settlement.
- 2The company reported a gross loss of $23.2 million in Q2 2022, a significant decrease from a gross profit of $174.1 million in Q2 2021, primarily due to pricing pressures and an impairment charge.
- 3A significant gain of $245.4 million was recognized from the sale of the Japan project development business.
- 4Module production increased by 12% year-over-year to 2.2 GWDC in Q2 2022, driven by improved manufacturing throughput.
- 5First Solar is expanding its manufacturing capacity with new facilities under construction in the U.S. and India, expected to commence operations in 2023.
- 6The company held $1.8 billion in cash and marketable securities as of June 30, 2022, indicating strong liquidity.
- 7Operating income was $144.8 million, significantly boosted by the gain on the sale of the Japan business, despite the gross loss.