Feb. 26 (Bloomberg) -- First Solar Inc., the largest U.S. solar-panel manufacturer, posted a 58 percent decline in profit as revenue slumped from the utility-scale power plants it’s building in the U.S. Southwest. The shares fell.
Fourth-quarter net income slid to $65.3 million, or 64 cents a share, from $154.2 million, or $1.74, a year earlier, Tempe, Arizona-based First Solar said yesterday in a statement. Excluding costs from writing down a plant in Vietnam and other items, earnings of 89 cents a share came in 14 cents below the average of 13 analysts’ estimates compiled by Bloomberg. Sales declined 29 percent to $768.4 million.
Sales in the fourth quarter of 2012 were $1.08 billion, driven mainly by recognizing revenue from its 550-megawatt Topaz project. The company exceeded that in the third quarter as it recognized half the revenue from Desert Sunlight, another 550-megawatt plant. Revenue is declining because First Solar isn’t selling more big projects, said Ben Kallo, an analyst at Robert W. Baird & Co. in San Francisco.
“Utility-scale is slowing down,” Kallo said in an interview before First Solar’s earnings were released. “The days of getting new 200 to 300 megawatt projects are over in the U.S. First Solar is burning through these big ones.”
First Solar fell 9.1 percent to $52.74 at the close in New York, the biggest drop since Jan. 6.
The Topaz plant is expected to be complete this year. It’s already the biggest U.S. solar farm with more than 300 megawatts in operation. Desert Sunlight will be finished next year.
“They aren’t filling their pipeline fast enough,” said Kallo.
The company added 1.7 gigawatts of solar projects to its pipeline in 2013, slightly more than the 1.6 gigawatts of panels it shipped, according to supplemental data on its website.
“We’re pleased we were able to meet our one-to-one bookings goal,” Chief Executive Officer Jim Hughes said yesterday on a conference call. That was helped by two projects added in the fourth quarter, a 150-megawatt solar farm planned in California and a 22-megawatt power plant in Texas that First Solar will own and operate, supplying energy to the grid at daily market prices without a contract.
The company expects per-share profit of 50 cents to 60 cents in the current quarter on sales of $800 million to $900 million. Analysts are expecting profit of 81 cents.
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