First Solar (NSDQ: FSLR) impressed investors Wednesday by showing that it was able to boost sales and profit during the economic downturn, though executives say the global market outlook remains murky.

The Tempe, Ariz.-based solar panel maker more than tripled its first-quarter net income to reach  $164.6 million, or $1.99 per share, from $46.6 million, or $0.57 per share in the first quarter of 2008. The company posted a fourth-quarter net income of $132.8 million, or $1.61 per share.

First Solar posted a first-quarter revenue of $418.2 million, doubling what the $196.9 million it brought in from the year-ago period but down about 3.6 percent from $433.7 million in the fourth quarter.

Lowered panel prices, an exchange rate decline for the euro and a change in customer mix contributed to the revenue decline from the fourth quarter, said First Solar CFO Jens Meyerhoff.

But the company also was able to lower its production cost to $0.93 per watt from $0.98 per watt in the fourth quarter by running two of its Malaysian factories at full capacity and improving the production rate at its third factory. First Solar produced 219.5 megawatts of solar panels in the first quarter, up 26 percent from the previous quarter.

The company aims to cut the production cost to $0.65 per watt by 2012.

First Solar's shares rose nearly 14 percent to reach $172.20 per share in after-hour trading.

Just a few minutes before the executives held an afternoon conference call with analysts to go over the financial results, the company announced that it would begin to look for a new chief executive to replace Michael Ahearn, who has held the position for nearly 10 years. He plans to become the company's executive chairman to focus on public policy advocacy.

Ahearn has nurtured First Solar from being a struggling private company to a Wall Street darling. The company is the largest thin-film solar panel maker in the world and claims to make solar panels cheaper than anyone else (see First Solar: Hits 1GW of Solar Panels). Most of the solar panels sold today use crystalline silicon as the ingredient for converting sunlight into electricity while First Solar uses a mix of cadmium and tellurium instead.

Ahearn said he has been spending more time on lobbying for national policies that would create a long-term, viable market for solar equipment makers, and he would like to devote all of his time on that quest. He noted that the federal stimulus plan passed by Congress earlier this year would provide a critical boost for the solar industry, but the various grants and loans from the plan would only last a few years.

"The manufacturing incentives will be useful sweeteners, but that won't substitute for creating a robust market," Ahearn told the analysts over the call. "You ought to get the policy and program right, and you can't leave it all to the states. Otherwise it'd be fragmented and underfunded."

He added that he's been helming the company for a while, and it's healthy to bringing someone new to the role. The company hasn't set a deadline for when to anoint a new CEO, he said.

First Solar has fared better than many of its competitors at a time when the credit crunch has dramatically lowered demand for solar energy equipment. SunPower, a crystalline silicon solar panel maker in San Jose, Calif., recently posted a first-quarter net loss and scaled back its manufacturing plans (see SunPower Posts 1Q Net Loss, Delays Factory Plansand  Pricing Pressure Beating Down on SunPower).

First Solar sells most of its panels in Europe, where federal incentives that guarantee high electricity rates for solar energy system owners to sell the power they produce have made countries such as Germany and Spain the world's largest markets.

The U.S. market promises to be a booming one, too, thanks to new, generous federal subsidies for solar panel makers as well as consumers and businesses that buy and own solar energy systems. But some of those incentives are not yet in place – federal agencies are still writing rules for carrying out some of the key programs that would give tax credit for manufacturers and grants for investors of solar power projects. Companies and analysts expect the federal money to become available in the second half of this year.

First solar has deliberately kept its panel prices lower than what it sells to Europe in order to gain entry into the U.S. market, Ahearn said. He said the company isn't just competing with other solar panel makers for the U.S. market, but also companies in wind, geothermal and concentrating solar thermal sectors. Many states have policies that require utilities to add more renewable power to their offerings, but those policies mostly don't specify what types of renewable energy.

The company also is entering the power plant construction business in earnest, a move that would provide a new source of revenue and popularize the installation of its solar panels in the United States.

Earlier this month, the company announced it had snagged a contract to build a 48-megawatt project in Nevada for Sempra Generation, which plans to sell the electricity from the project to a utility. First Solar also spent $400 million buying more than 1-gigawatt of unfinished projects from OptiSolar, a Hayward, Calif.-based startup that couldn't line up enough money to do business (see First Solar Buys OptiSolar's Power Projects andOptiSolar Shuts Production, Lays Off 200).

First Solar didn't provide sales guidance for the second quarter. For 2009, the company expects to generate $1.9 to $2 billion in sales.