First Solar, Inc. Announces Third Quarter 2024 Financial Results
-
Net sales of
$0.9 billion -
Net income per diluted share of
$2.91 , impacted by$50 million product warranty reserve charge -
Net cash balance of
$0.7 billion - YTD net bookings of 4.0 GW; 0.4 GW since second quarter earnings call
- Expected sales backlog of 73.3 GW
Net sales for the third quarter were
The Company reported third quarter net income per diluted share of
Cash, cash equivalents, restricted cash, restricted cash equivalents, and marketable securities, less debt at the end of the third quarter, decreased to
“As we approach the end of 2024, we remain pleased with the progress made across our business, navigating against a backdrop of industry volatility and political uncertainty, with a continued focus on balancing growth, profitability, and liquidity,” said
Our 2024 guidance has been updated as follows:
|
Prior |
Current |
|
|
|
Gross Margin (1) |
|
|
Operating Expenses (2) |
|
|
Operating Income (3) |
|
|
Earnings per Diluted Share |
|
|
Net Cash Balance (4) |
|
|
Capital Expenditures |
|
|
Volume Sold |
15.6GW to 16.3GW |
14.2GW to 14.6GW |
—————————— |
||
(1) |
Assumes |
|
(2) |
Assumes |
|
(3) |
Assumes |
|
(4) |
Defined as cash, cash equivalents, restricted cash, restricted cash equivalents, and marketable securities, less expected debt at the end of 2024 |
The guidance figures presented above are forward-looking statements that are subject to a variety of assumptions and estimates, including with respect to certain factors related to the Inflation Reduction Act of 2022 (the “IRA”). Among other things, such factors include (i) the total Section 45X tax credit and (ii) the timing and ability to monetize such credit. Investors are encouraged to listen to the conference call and to review the accompanying materials, which contain more information about First Solar’s third quarter 2024 financial results, 2024 guidance, and financial outlook.
Conference Call Details
About
For
This release contains forward-looking statements which are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements in this release, other than statements of historical fact, are forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning: demand for our technology; increased research and development investment; new domestic and international capacity coming online; production and delivery of our modules; anticipated claims under our limited product warranty obligations and any related remediation commitments; our financial guidance for 2024, including future financial results, net sales, gross margin, operating expenses, operating income, earnings per diluted share, net cash balance, capital expenditures, expected earnings cadence, volume sold, shipments, bookings, products and our business and financial objectives for 2024; the availability of benefits under certain production linked incentive programs, and the impact of the IRA including the total advanced manufacturing production credit available to us under Section 45X of the Internal Revenue Code. These forward-looking statements are often characterized by the use of words such as “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “seek,” “believe,” “forecast,” “foresee,” “likely,” “may,” “should,” “goal,” “target,” “might,” “will,” “could,” “predict,” “continue,” “contingent” and the negative or plural of these words and other comparable terminology. Forward-looking statements are only predictions based on our current expectations and our projections about future events and therefore speak only as of the date of this release. You should not place undue reliance on these forward-looking statements. We undertake no obligation to update any of these forward-looking statements for any reason, whether as a result of new information, future developments or otherwise. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by our forward-looking statements. These factors include, but are not limited to: structural imbalances in global supply and demand for PV solar modules; our competitive position and other key competitive factors; the market for renewable energy, including solar energy; the reduction, elimination, expiration or introduction of government subsidies, policies, and support programs for solar energy projects; the impact of public policies, such as tariffs or other trade remedies imposed on solar cells and modules; the passage of legislation intended to encourage renewable energy investments through tax credits, such as the IRA; the impact of the IRA on our expected results of operations in future periods, which may be affected by technical guidance, regulations, subsequent amendments or interpretations of the law; interest rate fluctuations and both our and our customers’ ability to secure financing; changes in the exchange rates between the functional currencies of our subsidiaries and other currencies in which assets and liabilities are denominated; our ability to execute on our long-term strategic plans; the loss of any of our large customers, or the ability of our customers and counterparties to perform under their contracts with us; our ability to execute on our solar module technology and cost reduction roadmaps; the performance of our solar modules upon installation; our ability to improve the wattage of our solar modules; our ability to incorporate technology improvements into our manufacturing process, including the production of bifacial solar modules and the implementation of our Copper Replacement (“CuRe”) program; the satisfaction of conditions precedent in our sales agreements; our ability to attract new customers and to develop and maintain existing customer and supplier relationships; general economic and business conditions, including those influenced by
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CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands, except share data) |
||||||||
(Unaudited) |
||||||||
|
|
|
|
|
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
1,005,130 |
|
|
$ |
1,946,994 |
|
Marketable securities |
|
|
264,691 |
|
|
|
155,495 |
|
Accounts receivable trade, net |
|
|
762,138 |
|
|
|
660,776 |
|
Government grants receivable, net |
|
|
6,659 |
|
|
|
659,745 |
|
Inventories |
|
|
1,250,629 |
|
|
|
819,899 |
|
Other current assets |
|
|
528,856 |
|
|
|
391,900 |
|
Total current assets |
|
|
3,818,103 |
|
|
|
4,634,809 |
|
Property, plant and equipment, net |
|
|
5,326,121 |
|
|
|
4,397,285 |
|
Deferred tax assets, net |
|
|
237,868 |
|
|
|
142,819 |
|
Restricted marketable securities |
|
|
211,130 |
|
|
|
198,310 |
|
Government grants receivable |
|
|
871,745 |
|
|
|
152,208 |
|
|
|
|
29,585 |
|
|
|
29,687 |
|
Intangible assets, net |
|
|
56,645 |
|
|
|
64,511 |
|
Inventories |
|
|
269,675 |
|
|
|
266,899 |
|
Other assets |
|
|
615,766 |
|
|
|
478,604 |
|
Total assets |
|
$ |
11,436,638 |
|
|
$ |
10,365,132 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
265,320 |
|
|
$ |
207,178 |
|
Income taxes payable |
|
|
98,446 |
|
|
|
22,134 |
|
Accrued expenses |
|
|
520,835 |
|
|
|
524,829 |
|
Current portion of debt |
|
|
208,261 |
|
|
|
96,238 |
|
Deferred revenue |
|
|
645,050 |
|
|
|
413,579 |
|
Other current liabilities |
|
|
44,253 |
|
|
|
42,200 |
|
Total current liabilities |
|
|
1,782,165 |
|
|
|
1,306,158 |
|
Accrued solar module collection and recycling liability |
|
|
139,035 |
|
|
|
135,123 |
|
Long-term debt |
|
|
373,321 |
|
|
|
464,068 |
|
Deferred revenue |
|
|
1,320,331 |
|
|
|
1,591,604 |
|
Other liabilities |
|
|
228,138 |
|
|
|
180,710 |
|
Total liabilities |
|
|
3,842,990 |
|
|
|
3,677,663 |
|
Commitments and contingencies |
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
|
||||
Common stock, |
|
|
107 |
|
|
|
107 |
|
Additional paid-in capital |
|
|
2,892,407 |
|
|
|
2,890,427 |
|
Accumulated earnings |
|
|
4,869,994 |
|
|
|
3,971,066 |
|
Accumulated other comprehensive loss |
|
|
(168,860 |
) |
|
|
(174,131 |
) |
Total stockholders’ equity |
|
|
7,593,648 |
|
|
|
6,687,469 |
|
Total liabilities and stockholders’ equity |
|
$ |
11,436,638 |
|
|
$ |
10,365,132 |
|
|
|||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||||||||
(In thousands, except per share amounts) |
|||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales |
|
$ |
887,668 |
|
|
$ |
1,010,482 |
|
|
$ |
801,090 |
|
|
|
$ |
2,692,258 |
|
|
$ |
2,160,049 |
|
Cost of sales |
|
|
442,357 |
|
|
|
511,593 |
|
|
|
424,915 |
|
|
|
|
1,402,055 |
|
|
|
1,361,403 |
|
Gross profit |
|
|
445,311 |
|
|
|
498,889 |
|
|
|
376,175 |
|
|
|
|
1,290,203 |
|
|
|
798,646 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative |
|
|
46,293 |
|
|
|
46,560 |
|
|
|
50,172 |
|
|
|
|
138,680 |
|
|
|
140,528 |
|
Research and development |
|
|
50,197 |
|
|
|
51,937 |
|
|
|
41,190 |
|
|
|
|
144,876 |
|
|
|
108,445 |
|
Production start-up |
|
|
26,822 |
|
|
|
27,451 |
|
|
|
12,059 |
|
|
|
|
69,681 |
|
|
|
54,930 |
|
Litigation loss |
|
|
— |
|
|
|
430 |
|
|
|
— |
|
|
|
|
430 |
|
|
|
35,590 |
|
Total operating expenses |
|
|
123,312 |
|
|
|
126,378 |
|
|
|
103,421 |
|
|
|
|
353,667 |
|
|
|
339,493 |
|
Gain on sales of businesses, net |
|
|
— |
|
|
|
— |
|
|
|
211 |
|
|
|
|
1,115 |
|
|
|
329 |
|
Operating income |
|
|
321,999 |
|
|
|
372,511 |
|
|
|
272,965 |
|
|
|
|
937,651 |
|
|
|
459,482 |
|
Foreign currency loss, net |
|
|
(5,158 |
) |
|
|
(9,649 |
) |
|
|
(987 |
) |
|
|
|
(17,665 |
) |
|
|
(11,586 |
) |
Interest income |
|
|
22,580 |
|
|
|
24,599 |
|
|
|
23,254 |
|
|
|
|
74,424 |
|
|
|
74,102 |
|
Interest expense, net |
|
|
(9,008 |
) |
|
|
(9,765 |
) |
|
|
(3,734 |
) |
|
|
|
(27,983 |
) |
|
|
(5,897 |
) |
Other expense, net |
|
|
(3,071 |
) |
|
|
(565 |
) |
|
|
(1,033 |
) |
|
|
|
(6,435 |
) |
|
|
(1,492 |
) |
Income before taxes |
|
|
327,342 |
|
|
|
377,131 |
|
|
|
290,465 |
|
|
|
|
959,992 |
|
|
|
514,609 |
|
Income tax expense |
|
|
(14,386 |
) |
|
|
(27,775 |
) |
|
|
(22,067 |
) |
|
|
|
(61,064 |
) |
|
|
(33,071 |
) |
Net income |
|
$ |
312,956 |
|
|
$ |
349,356 |
|
|
$ |
268,398 |
|
|
|
$ |
898,928 |
|
|
$ |
481,538 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
$ |
2.92 |
|
|
$ |
3.26 |
|
|
$ |
2.51 |
|
|
|
$ |
8.40 |
|
|
$ |
4.51 |
|
Diluted |
|
$ |
2.91 |
|
|
$ |
3.25 |
|
|
$ |
2.50 |
|
|
|
$ |
8.36 |
|
|
$ |
4.49 |
|
Weighted-average number of shares used in per share calculations: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
|
107,049 |
|
|
|
107,042 |
|
|
|
106,834 |
|
|
|
|
107,015 |
|
|
|
106,795 |
|
Diluted |
|
|
107,562 |
|
|
|
107,525 |
|
|
|
107,498 |
|
|
|
|
107,514 |
|
|
|
107,326 |
|
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
|
|
Nine Months Ended
|
||||||
|
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
|
||||
Net income |
|
$ |
898,928 |
|
|
$ |
481,538 |
|
Adjustments to reconcile net income to cash provided by operating activities: |
|
|
|
|
||||
Depreciation, amortization and accretion |
|
|
299,079 |
|
|
|
218,303 |
|
Share-based compensation |
|
|
21,987 |
|
|
|
23,209 |
|
Deferred income taxes |
|
|
(85,343 |
) |
|
|
(46,053 |
) |
Gain on sales of businesses, net |
|
|
(1,115 |
) |
|
|
(329 |
) |
Other, net |
|
|
3,238 |
|
|
|
393 |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
Accounts receivable, trade |
|
|
(68,823 |
) |
|
|
(385,046 |
) |
Inventories |
|
|
(434,375 |
) |
|
|
(262,665 |
) |
Government grants receivable |
|
|
(59,181 |
) |
|
|
(429,744 |
) |
Other assets |
|
|
(183,127 |
) |
|
|
(126,073 |
) |
Income tax receivable and payable |
|
|
35,708 |
|
|
|
(16,809 |
) |
Accounts payable and accrued expenses |
|
|
(8,953 |
) |
|
|
121,382 |
|
Deferred revenue |
|
|
(13,159 |
) |
|
|
472,934 |
|
Other liabilities |
|
|
2,139 |
|
|
|
(9,889 |
) |
Net cash provided by operating activities |
|
|
407,003 |
|
|
|
41,151 |
|
Cash flows from investing activities: |
|
|
|
|
||||
Purchases of property, plant and equipment |
|
|
(1,212,537 |
) |
|
|
(1,039,863 |
) |
Purchases of marketable securities and restricted marketable securities |
|
|
(2,014,764 |
) |
|
|
(3,220,467 |
) |
Proceeds from sales and maturities of marketable securities |
|
|
1,897,997 |
|
|
|
3,996,439 |
|
Acquisitions, net of cash acquired |
|
|
— |
|
|
|
(35,739 |
) |
Other investing activities |
|
|
(12,617 |
) |
|
|
— |
|
Net cash used in investing activities |
|
|
(1,341,921 |
) |
|
|
(299,630 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Proceeds from borrowings under debt arrangements, net of issuance costs |
|
|
227,654 |
|
|
|
307,214 |
|
Repayment of debt |
|
|
(205,821 |
) |
|
|
— |
|
Payments of tax withholdings for restricted shares |
|
|
(20,144 |
) |
|
|
(31,100 |
) |
Contingent consideration payment and other financing activities |
|
|
(7,568 |
) |
|
|
— |
|
Net cash (used in) provided by financing activities |
|
|
(5,879 |
) |
|
|
276,114 |
|
Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents |
|
|
(2,805 |
) |
|
|
(855 |
) |
Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents |
|
|
(943,602 |
) |
|
|
16,780 |
|
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of the period |
|
|
1,965,069 |
|
|
|
1,493,462 |
|
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of the period |
|
$ |
1,021,467 |
|
|
$ |
1,510,242 |
|
Supplemental disclosure of noncash investing and financing activities: |
|
|
|
|
||||
Property, plant and equipment acquisitions funded by liabilities |
|
$ |
264,480 |
|
|
$ |
185,064 |
|
Proceeds to be received from asset-based government grants |
|
$ |
159,490 |
|
|
$ |
152,458 |
|
Acquisitions funded by contingent consideration |
|
$ |
11,000 |
|
|
$ |
18,500 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241029861414/en/
investor@firstsolar.com
First Solar Media
media@firstsolar.com
Source: