First Solar's Q2 Profit Doubles Due to Increased Module Shipments
POWER & RENEWABLE ENERGY

First Solar's Q2 Profit Doubles Due to Increased Module Shipments

US-based First Solar reported a significant increase in its net income for the second quarter of 2024, which rose by 104.8 per cent to reach $349.4 million, up from $170.6 million the previous year. This growth was attributed mainly to higher module sales and improved pricing.

The company's quarterly net sales climbed to $1.01 billion, marking a 24.6 per cent increase from $810.7 million in the same period of 2023, reflecting a rise in module shipments.

Operating expenses saw a modest decrease of 11 per cent, falling from $142 million last year to $126.4 million, which positively impacted the company?s profitability. This reduction was primarily due to lower litigation-related expenses.

Gross margin also showed improvement, with gross profit rising by 60.7 per cent to $498.9 million for the quarter, compared to $310.4 million the previous year. This increase in profitability was driven by reduced costs in warehousing, logistics, and production.

As of now, the company?s year-to-date net bookings stand at 3.6 GW, and the total contracted backlog is at 75.9 GW, with orders extending through 2030.

During a post-earnings call with analysts, CEO Mark Widmar expressed concerns about the uncertain policy environment facing the solar industry with the upcoming November election. He noted that this uncertainty is impacting access to capital and project development decisions.

Widmar observed that as the second quarter progressed, the effects of this uncertainty became more evident, with increasing constraints on access to capital for both emerging solar technology companies and established firms aiming to expand domestic manufacturing. He mentioned that financing parties are delaying investment decisions until there is more clarity on the policy landscape.

Widmar also raised concerns about potential changes to the Inflation Reduction Act and related policies if Republicans gain control of the presidency and Congress or through executive actions by a new administration. He pointed out that this uncertainty is leading some developers to reconsider renewable projects in favour of fossil fuel alternatives.

US-based First Solar reported a significant increase in its net income for the second quarter of 2024, which rose by 104.8 per cent to reach $349.4 million, up from $170.6 million the previous year. This growth was attributed mainly to higher module sales and improved pricing. The company's quarterly net sales climbed to $1.01 billion, marking a 24.6 per cent increase from $810.7 million in the same period of 2023, reflecting a rise in module shipments. Operating expenses saw a modest decrease of 11 per cent, falling from $142 million last year to $126.4 million, which positively impacted the company?s profitability. This reduction was primarily due to lower litigation-related expenses. Gross margin also showed improvement, with gross profit rising by 60.7 per cent to $498.9 million for the quarter, compared to $310.4 million the previous year. This increase in profitability was driven by reduced costs in warehousing, logistics, and production. As of now, the company?s year-to-date net bookings stand at 3.6 GW, and the total contracted backlog is at 75.9 GW, with orders extending through 2030. During a post-earnings call with analysts, CEO Mark Widmar expressed concerns about the uncertain policy environment facing the solar industry with the upcoming November election. He noted that this uncertainty is impacting access to capital and project development decisions. Widmar observed that as the second quarter progressed, the effects of this uncertainty became more evident, with increasing constraints on access to capital for both emerging solar technology companies and established firms aiming to expand domestic manufacturing. He mentioned that financing parties are delaying investment decisions until there is more clarity on the policy landscape. Widmar also raised concerns about potential changes to the Inflation Reduction Act and related policies if Republicans gain control of the presidency and Congress or through executive actions by a new administration. He pointed out that this uncertainty is leading some developers to reconsider renewable projects in favour of fossil fuel alternatives.

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