First Solar Inc., the world’s largest maker of thin-film solar modules, raised its earnings forecast and promoted James Hughes to chief executive officer after posting its second-ever quarterly loss.
Net income this year will range from $4.00 to $4.50 a share, up from the company’s earlier forecast of $3.75 to $4.25, according to a statement today.
The company expects higher earnings in part from cost savings after it announced plans to cut 30 percent of its workforce this year.
First Solar is reducing capacity after a global surplus drove down solar-panel prices 49 percent in the past year and waning government support in Europe slowed demand. The company said March 17 it would fire about 2,000 workers worldwide and close a plant in Germany.
“Closure of the German operation is indicative of permanent change in Europe,” Rob Stone, an analyst at Cowen & Co. in Boston, said in a research note May 1. “We expect sizable charges for capacity adjustments to overwhelm operating results.” Stone has a neutral rating on the shares.
Hughes joined First Solar in March as chief commercial officer. He replaces Mike Ahearn, the company’s chairman and co-founder who stepped in as interim CEO in October after the company ousted Rob Gillette.
Excluding restructuring charges and warranty expenses, First Solar reported a loss of 8 cents a share. The company was expected to earn 48 cents a share, according to the average of 29 estimates compiled by Bloomberg. Sales fell 12 percent to $497 million.
Company’s First Loss
First Solar reported a net loss of $413.1 million in the fourth quarter, the first since it went public in 2006. The first-quarter results were released after the close of regular U.S. trading today. Shares fell 0.8 percent to $18.07 at the close in New York.
First Solar plans to close its plant in Frankfurt an der Oder, Germany, with about 560 megawatts of annual production capacity, in the fourth quarter. The company spent 170 million euros ($224 million) to double capacity at the facility and it reached full production in November.
The company also idled four production lines in Kulim, Malaysia, last month.
First Solar had 2,520 megawatts of production capacity at the end of the fourth quarter, and expects to produce 1,500 to 1,800 megawatts globally this year.