Analysts polled by Thomson Financial expect the Tempe, Ariz., firm to report a net income of $46.67 million, or 58 cents per share on $216.9 million in revenue, excluding any one-time charges.
First Solar reported $5.33 million in net income, or 58 cents per share, on $77.22 million in revenue in the second quarter of 2007. During the first quarter of this year, the company reported $46.6 million in net income, or 57 cents per share, on $196.9 million in revenue.
The second-quarter margin is expected to decline to 49.04 percent from 52.98 percent in the previous quarter, a result of money spent to build a 100-megawatt solar-panel production plant in Malaysia, said Sanjay Shrestha, a Lazard Capital Markets analyst, in a research note. Analysts, including John Hardy of American Technology Research, see the plant as key to First Solar's long-term success.
The new plant would enable First Solar to lower the manufacturing cost, calculated on a per-watt basis. The company was able to produce panels at $1.10 per watt by the fourth quarter last year. The Malaysian plant also would allow First Solar to fill backlog orders more quickly.
First Solar announced in January of last year it would build the $150 million plant with a minimum production capacity of 100 megawatts per year.
If the company continues to increase its cell efficiency, Shrestha said it could allow the company to sell more panels to U.S. utilities.
At the end of last year, First Solar reached an average cell efficiency of 10.6 percent, meaning the cells converted 10.6 percent of the sunlight that hit them into electricity, according to Piper Jaffray.
Steve Murphy, manager of design engineering for First Solar, said at this month's Intersolar North America conference in San Francisco that the company has reached panel efficiencies of 10.5 percent. Panels as a whole are slightly less efficient than individual cells.
Southern California Edison said earlier this month it had selected First Solar to supply a solar-power system for what it expects to be the world's largest solar-panel project (see First Solar Scores SCE Panel Bid).
On Tuesday, First Soar's stock rose $10.67, or 4 percent, to close at $277.57 per share.
Other solar companies that will post earnings in the coming weeks include:
- Yingli Green Energy Holding Co. (NYSE: YGE), which will report its second-quarter earnings before the market opens on Aug. 6.
- LDK Solar (NYSE: LDK), which will publish its financial results for the second quarter after the market closes on Aug. 11.
- JA Solar Holdings Co. (NSDQ: JASO), which will report its second-quarter earnings before the market opens on Aug. 12.
- Suntech Power Holdings (NYSE: STP), which will report its second-quarter financial results before the market opens on Aug. 20.