First Solar, Inc. (FSLR) 2014 Analyst Meeting To Deliver Positive News

First Solar earnings

First Solar, Inc. (NASDAQ:FSLR) will hold its 2014 Analyst Meeting on March 19, which is expected to deliver positive news across several areas including the company’s global opportunity, module and system cost reduction targets and progress with TetraSun, says a report from Stifel by analysts Jeffrey D. Osborne, Sven Eenmaa and Thomas Boyes. The company will also give guidance for 2014, and analysts expect the company to discuss the funding strategies including the stance on YieldCos.

Acquisitions still in early stages

For the last three quarters, First Solar, Inc. (NASDAQ:FSLR) reported an impressive addition to its funnel project from 5.5GWdc, in the first quarter of 2013, to 10.6GWdc, in the fourth quarter. The increase can partially be attributed to the 1.5GW project pipeline acquisition from Element Power. However, the analysts note that the acquisitions are still in the early stages, so, it is difficult to quantify their actual contribution. Also, the mid- to late stage funnel additions, which have more chances of conversion, decreased for the company in the last two quarters.

Many project to deliver revenue in 2014 for First Solar

Analysts believe that the 2014 guidance will see a boost from the company’s major project revenue push-outs in the second half of 2013. During the fourth quarter earnings call, management indicated that about $400 million of projects, which were earlier expected to materialize in 2013, will now deliver revenue in 2014.

In the last quarter, First Solar, Inc. (NASDAQ:FSLR) lowered its revenue outlook for 2013 by $200 million, which was at the midpoint of the guidance range. The guidance included revenue recognition from around 50% of the Desert Sunlight project, in the second half of 2013 (compared to one-third previously indicated), which indicated an allocation of revenue, for several projects totaling $500 million, from 2013 to 2014.

Analysts note that First Solar, Inc. (NASDAQ:FSLR) is still to realize revenues on 613MWac (~800MWdc) of projects. These projects have already been sold or are still in the process, and revenue from them is expected to come in 2014. For the purpose of calculation, analysts have used Topaz and Desert SunLight, which have already been recognized 72% and 62% respectively by the end of 2013, which is above the analyst’s expectations.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com