Wednesday, December 16, 2009

First Solar Announces 2010 Guidance and Capacity Expansion Plans (FSLR)

No time to listen to the call, I'll do that tonight. The stock is up $7.76 at $144.50 in early after-hours trade.
Two things to remember: 1) After the June call the stock was up $8.00 and then resumed it's downtrend. 2) Our target was the top of the Oct. 28 earnings release gap, $151 or so.
Here's the press release via NewsBlaze:

First Solar Inc. (Nasdaq: FSLR) today announced 2010 financial guidance and plans for the addition of eight production lines at its manufacturing center in Kulim, Malaysia starting production in first half 2011.

Fiscal year 2010 net sales are projected to be $2.7 to $2.9 billion, with EPS of $6.05 to $6.85. The Company plans to invest $365 million of capital to add two production plants, consisting of four manufacturing lines each. This expansion is expected to increase First Solar's annual capacity by 424 megawatts (MW), assuming the third quarter 2009 reported annual line run rate of 53 MW.

"First Solar is expanding capacity to satisfy a global contracted and advanced pipeline of over six gigawatts (GW) from 2010-2012," said Rob Gillette, First Solar chief executive officer. "In 2009 we increased our contracted North American pipeline by approximately 1.5GW, expanding our penetration in transition markets. This drives further capacity needs around a demand pool that is less volatile and more predictable than the traditional feed in tariff-based markets."

With the announced expansion in Malaysia and the previously announced two-line factory in France, First Solar expects to add 10 production lines during 2010 and 2011, increasing capacity by over 48% from current levels, bringing First Solar's annual or announced production capacity to approximately 1.8GW based on current production levels.

In 2010, First Solar forecasts net sales of $2.7 to $2.9 billion. Consolidated gross margins are expected to be 38% with operating margins at 23-24%, influenced by a mix shift to the systems business, which includes $0.6-0.8 billion of EPC/project development. Start-up expenses associated with the Malaysian expansion are projected to be approximately $25 million, and stock-based compensation is projected to be $95 to $105 million. Other assumptions include a tax rate of 15%, annual blended euro exchange rate of $1.38 (based on a 2010 spot rate of $1.40/Euro), and diluted shares outstanding of 86 to 87 million. EPS is projected in the range of $6.05 to $6.85. Total capital spending is projected to range from $500 to $550 million, including the Malaysian expansion. As a result, the Company expects to generate $730 to $790 million of operating cash flow and $180 to $290 million of free cash flow.

The Company has posted a presentation describing this guidance, including additional details regarding the key assumptions relating to this guidance, on the Investor section of its website at The guidance will also be discussed in a live audio webcast beginning today at 4:15 p.m. ET. Please visit to access the webcast....