Increasing solar module sales has enabled First Solar to improve its net sales for Q2/2022 by $254 million from last quarter to a total of $621 million, but declined 8% YoY, as it lowered its earnings guidance for 2022 citing legacy systems business asset impairment in Chile and Japanese Yen devaluation.
The company turned profitable in the reporting quarter with $56 million net income, after reporting a net loss of -$43 million in the previous quarter; however it was still down from $82 million income earned a year back (see First Solar's Q1/2022 Financial Results).
First Solar produced 2.2 GW solar modules aided by higher throughput due to upgrades carried out in the Vietnam fab, and shipped 2.5 GW.
Since its last financial call in April, the manufacturer booked 10.4 GW new orders taking its total contracted to-date backlog to 44.3 GW. It is sold out for 2022, 2023 and 2024 for products from all manufacturing fabs, excluding India. "We have 12 GW for planned deliveries, excluding India, in 2025 and have 2.6 GW of planned deliveries in 2026 and beyond," said CEO Mark Widmar.
Recently, Intersect Power placed an order for 2.4 GW DC worth of modules with First Solar, after the latter announced securing orders from France' Akuo Energy and Malaysia's Solarvest in recent past (see 2.4 GW DC Solar Module Order For First Solar).
Strategically, now First Solar is putting the onus of shipping and transportation on the customers which will save it the logistic costs and for the customers lower ASP modules. Majority of its 3.3 GW India fab modules will be delivered to the customers at factory gates.
In light of the US senators coming to a consensus on Inflation Reduction Act of 2022 that promises manufacturing incentives, First Solar said if all goes well, it may 'pivot quickly to reevaluate US manufacturing expansion' after reportedly saying it wasn't considering the homeland for another fab in the absence of any incentives (see US Senate Settles For $369 Billion Clean Energy Investment).
However, Widmar said his company has had productive meetings with Indian and French heads of state as these countries seek to diversify and grow their domestic capabilities.
The company now guides for 2022 net sales of $2.55 billion to $2.8 billion, having increased it from $2.4 billion to $2.6 billion, but gross profit and operating income guidance has been lowered to $115 million to $165 million, and $5 million to $70 million, respectively. Shipment guidance remains unchanged at 8.9 GW to 9.4 GW.
Analyzing the quarterly results, Roth Capital said, 'FSLR delivered a mixed Q2, lowering its 2022 margin/EPS guidance on project one-timers. While management has a credible margin expansion narrative, it may take years to play out.' However,
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