BUSINESS

First Solar profit increases but loss predicted this quarter

Ryan Randazzo
The Republic | azcentral.com
U.S. Interior Secretary Sally Jewell (left) tours the Desert Sunlight Solar Farm on Feb. 9, 2015. Completing the majority of the plant in the quarter ending Dec. 31 is one reason First Solar predicts lower earnings in the current quarter.
  • First Solar saw a large increase in quarterly profit to end 2014.
  • The company predicts a loss for the current quarter.

Tempe-based First Solar Inc. reported an increase in fourth-quarter profits Tuesday but forecast lower earnings for the first quarter because it is completing some large power plants and spinning off others into a separate company.

The solar panel maker and power plant developer saw its stock increase more than 10 percent Tuesday after announcing its so-called "yieldco," or separate company that will own power plants and earn money from the electricity they sell. First Solar will partner with rival SunPower Corp. in that business.

First Solar shares closed Tuesday at $54.70, up $5.06, or 10.19 percent. But the company, which reported earnings after the markets closed, forecast a net loss of 25 cents to 35 cents per share for the current quarter. Analysts had been projecting a profit of 84 cents per share for the current quarter.

The loss is predicted in part because the company has recently completed large projects, including the 550-megawatt Desert Sunlight plant in California near Joshua Tree National Park, and also won't generate sales revenue from projects it is placing in the yieldco.

Chief Financial Officer Mark Widmar said on a conference call with investors that keeping some of its large power plants to include in the yieldco, rather than selling them, could affect short-term profits but was in the best interest of long-term stability for the company.

Profit for the fourth quarter rose to $192 million, or $1.89 per share, compared with $65 million, or 64 cents per share, in the same quarter a year earlier.

Revenue rose 31 percent for the quarter to $1 billion.

Analysts had expected earnings of 76 cents per share on revenue of $1.28 billion.

Full-year profits for 2014 were $397 million, or $3.91 per share, compared with $353 million, or $3.70 per share, in 2013. Annual revenue increased to $3.39 billion from $3.31 billion.