Friday, July 30, 2010

First Solar Q2 2010 Earnings Call Transcript and a Couple Small Upgrades (FSLR)

In early pre-market the stock is down $5.40 at $130.10.
Kaufman Bros. upped their target to $172 from $162. Auriga to $175 from $173.
Reality is going to intrude on the blogging today, I'll have to come back to this.
Here's the presentation management is talking about.
In the meantime, via Seeking Alpha:
Management Discussion
I'm going to cut to the Q&A, this is the bit I was referring to when I said "Bad tone to the call", yesterday. Management seemed to be fumbling around in response to some of the questions, e.g.
...Unidentified Analyst
My question's for Mr. Gillette. Mr. Gillette, First Solar is operating extremely well, but the market is growing much faster than your capacity in 2010 and thus, you're not reaching the market share targets that you set earlier. I'm wondering, what market signals would you need to expand production more aggressively?
Robert Gillette
Well, as you know, we've announced quite a bit of expansion already and we're considering what we may do in the future. It does take time to get the assets in the ground and the equipment in place, so we're working as quickly as we can, I think, to get that achieved. So, yes, we definitely have a near term challenge as it relates to getting product out the door and we tell Bruce, we'd like to get more out every day, so we work on that. And you saw the throughput improvements in the quarter. So we are continuing to evaluate our next increments of capacity and once determined, we'll advise you all of what they are.
And we'll go next to Timothy Arcuri with Citi.
Timothy Arcuri - Citigroup Inc
I had also asked you this last call, but I know that you guys have sort of gotten away from sort of giving a market forecast next year. But maybe you can answer the question of whether you feel better or worse about 2011 demand today than you did when I asked you the same question three months ago?
Bruce Sohn
Better or worse, I think like we state in the front part of the presentation in terms of market, we think, given the changes in FiT and other advances and changes in Germany, that the market is going to grow significantly in 2010. So we -- and the range is, I guess, kind of the consensus forecast is in the 6.5% to 7% range, we gave a range of six to eight -- so we think there's significant growth there. We think that, as we've mentioned before, the markets in Europe outside of Germany are going to grow more rapidly than Germany. So we think these FiT changes may slow the growth or change the market in Germany quite a bit in 2011. But we also think that the other markets, Italy, France and Spain will continue to grow. I think our last estimates on the call were in the range of 60% compounded. So we're putting a lot of focus on that growth, that [indiscernible] (59:13) of it. So I think that we feel good about the demand and our position in 2011. It's those changes and what the impact of those changes that will affect the market and what happens there. I think as Jens mentioned and I mentioned in the body of the presentation, we also have the captive pipeline that buffers the fluctuations that are there and the changes that are there, and we'll still be producing everything we can to fulfill the commitments to external customers as well as our captive pipeline....FULL QA