First Solar Inc. heads into a restructuring year after reporting its biggest-ever loss.
The largest U.S. solar manufacturer’s fourth-quarter net loss was $719.9 million, or $6.92 a share, compared with income of $164.1 million, or $1.60 a share, a year earlier, Tempe, Arizona-based First Solar said in a statement Tuesday. Excluding restructuring charges and other items, the company posted a profit of $1.24 a share, beating the 98-cent average of 18 analysts’ estimates compiled by Bloomberg.
The big loss was due mainly to a restructuring program announced in November, as a global oversupply helped drag panel prices down 35% last year. First Solar abandoned plans to introduce a new panel design this year, the Series 5, while firing more than a quarter of its workforce and retooling its factories to produce the Series 6 starting in mid-2018.
That means the company is relying on its aging Series 4 design, which is less competitive compared to rivals’ products, and sales plunged in the quarter to $480.3 million, from $942.3 billion a year earlier. Chief Executive Officer Mark Widmar is calling 2017 a transition year, and he revised downward his earnings forecast for this year to a loss of 5 cents to 80 cents a share, from the prior forecast ranging from a loss of 10 cents a share to profit of 45 cents. He was promoted in July from chief financial officer and immediately began reviewing First Solar’s strategy.
The last time First Solar reported a loss of this magnitude was the first quarter of 2012, when solar suppliers were suffering through a global glut that dragged down prices and ate into margins. The company lost $5.20 a share then, in part because of another restructuring program.