Energy
Wednesday, July 31st, 2024 4:03 pm EDT
Key Points
- Strong Financial Performance: First Solar reported better-than-expected second-quarter results, with earnings per share of $3.25 and revenue of $1.01 billion, significantly surpassing analyst expectations and marking a 24% increase in sales compared to the same period last year.
- Impact of U.S. Election Uncertainty: CEO Mark Widmar highlighted that uncertainty surrounding the upcoming U.S. presidential election, particularly the potential for policy changes affecting tax credits under the Inflation Reduction Act, has created constraints on capital access and caused hesitancy among investors and developers.
- Unchanged 2024 Forecast: Despite strong quarterly results, First Solar maintained its 2024 forecast with expected earnings of $13.00 to $14.00 per share and revenue between $4.4 billion and $4.6 billion. The company anticipates demand for utility-scale renewables to continue growing, driven by factors like data center expansions and reshoring of manufacturing, regardless of the election outcome.
First Solar reported strong second-quarter results, surpassing analysts’ expectations with earnings per share of $3.25 against an anticipated $2.69 and revenue of $1.01 billion compared to the forecasted $941.5 million. This represents a 24% increase from $810 million in the same period last year. Net income more than doubled, reaching $349.4 million, or $3.25 per share, up from $171 million, or $1.59 per share. Despite these positive results, CEO Mark Widmar highlighted challenges faced by solar companies due to tightening access to capital amidst uncertainty over the upcoming U.S. presidential election. Concerns have emerged that a Republican victory could impact tax credits provided under the Inflation Reduction Act, leading investors and developers to delay decisions and reassess project risks and returns. Some traditional energy companies are even considering shifting focus back to fossil fuels.
First Solar maintained its 2024 forecast, predicting earnings between $13.00 and $14.00 per share on revenue ranging from $4.4 billion to $4.6 billion. The company anticipates selling between 15.6 and 16.3 gigawatts, with net cash projected at $600 million to $900 million. However, revenue, volume sold, and net cash are expected to hit the lower end of these estimates due to the cancellation of a 0.4 gigawatt contract by a European utility company, which will still pay a termination fee. Despite this, First Solar has secured 3.6 gigawatts in net bookings so far this year, contributing to an expected backlog of 75.9 gigawatts with orders extending through 2030. CFO Alexander Bradley noted the company’s cautious approach to new bookings due to election uncertainties.
Widmar expressed confidence in the continued growth of utility-scale demand for renewables, regardless of the election outcome, driven by factors such as the expansion of data centers, reshoring of manufacturing, and cryptocurrency mining. He emphasized that solar energy, in many U.S. locations, remains the most cost-effective energy source, largely independent of policy decisions.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/07/30/first-solar-fslr-q2-2024-earnings-report.html
