First Solar Forecasts Strong Earnings in 2010

Despite the recession, First Solar has had a pretty good 2009. Last week, the company held a conference call in which it announced higher than expected earning projections for 2010. First Solar is the world’s leading thin-film solar panel manufacturer. Although their panels, made with cadmium telluride (CdTe) solar cells, are less efficient than those of conventional rivals like California’s SunPower, First Solar has the lowest production costs in the industry.

Company CEO Rob Gillette forecast sales in 2010 to reach between $2.7 and $2.9 billion, a solid $300 to $500 million higher than Wall Street predictions for the first PV company to produce more than 1 gigawatt of home solar power in a single year. Gillette also announced plans to expand capacity from 2010-2012, ultimately reaching 1.8-GW annual production in that time. Coupled with all this good news is the unfortunate shelving of a 55-MW solar plant in Los Angeles and an ongoing recession that can’t help but foster doubt.

Indeed, high expectations for 2010 and a solid 2009 are not enough to lift First Solar stocks above the sea of volatility that is the solar market. On the surface, First Solar’s better-than-average predictions are a good sign of things to come, and that reaction is easy to find among green stock analysts. Equally easy to find, however, is skepticism. There are reasons to point in either direction, such as the scaling down of solar incentives in Germany, a huge market for First Solar, as well as surging rivals in China.

Yet while stocks have fallen hard for many solar companies in 2009, First Solar has been one example of stability. It will end the year well below its early summer peak, but stocks have remained well over $100 all year and stand at over $132 per share as I write this. If nothing else, 2010 will be a very interesting year as American and Chinese solar companies square off in the global marketplace. Will First Solar, SunPower and others be able to compete with fast-growing Chinese companies like Trina Solar and Yingli Green Energy Holdings? First Solar certainly thinks so.

Photo Credit: Energy-guru