Costs tied to replacing defective panels hurt the company’s bottom line.
It’s alright – they’ve changed their warrantee so that consumers are again the losers in the great solar scam.
First Solar Inc. posted a fourth-quarter loss as a major write-down, costs associated with replacing defective solar panels and lower sales prices weighed on its bottom line.
The company also cut its sales forecast for 2012 by $200 million to between $3.5 billion and $3.8 billion.
First Solar executives said Tuesday that the company would scale back production at its factories more sharply than previously anticipated to match supply with weaker-than-expected global demand for solar power.
First Solar Chairman and acting Chief Executive Mike Ahearn said the company is still working on a three-year plan to reorganize the business and to compete with fossil-fuel electricity generation in new markets such as India, the Middle East and Latin America. In the future,First Solar will focus on building and selling complete solar-power systems, rather than selling individual solar panels as it does now, he said.
“The key to First Solar’s success is to develop new markets that do not depend on subsidies,” Mr. Ahearn said on a conference call with analysts. “We believe we can do this by focusing on regions in the world that need more peak-demand electricity.”
The company released its results after the close of 4 p.m. trading. Its shares were down 8% at $33.50 after hours on the weaker-than-expected results and weaker sales outlook.
First Solar and its rivals have seen their profits and stock prices dwindle as a global oversupply of solar panels and manufacturing capacity and relatively weak demand have driven prices lower. The low prices and tough market conditions have driven some companies out of business. They include Solyndra LLC, which received more than $500 million in government funding.
Mark Widmar, chief financial officer, said First Solar will cut production to 60% to 70% of capacity, 10 to 20 percentage points more than announced in December. The company has halted plans for a factory in Vietnam and has put its Arizona factory on indefinite hold, Mr. Widmar said. First Solar also will curtail its German plant’s output.
Meanwhile, the company, which is based in Arizona but does most of its manufacturing in Malaysia, said it has spent nearly $254 million replacing customers’ solar panels that didn’t perform as promised and changing its warranty.
Most of the panels that had to be replaced were made between June 2008 and June 2009, after the company had made changes in its manufacturing process. The panels experienced premature power loss, associated with degradation amid high temperatures, the company said.