The company just announced 2011 financial guidance. This afternoon's upcoming conference call will add some color to these numbers and we'll update that as the call proceeds.
Here are the basic numbers for 2011 guidance. These figures were in-line or mildly exceeded street expectations.
In 2011, First Solar forecasts net sales in the range of $3.7 billion to $3.9 billion, up about 46 percent year-over-year compared to the midpoint of 2010 guidance provided on October 28, 2010.
The net sales forecast is comprised of $2.8 billion to $2.9 billion of module sales and $0.9 billion to $1.0 billion of EPC/project development sales.
EPS is forecasted to grow to between $8.75 to $9.50 per fully diluted share and consolidated operating income is $875 to $975 million.
These forecasts include $80 million to $85 million of manufacturing start-up expenses and $15 million to $20 million of factory ramp costs associated with plant expansions. The firm plans to invest $1 billion to $1.1 billion of capital to nearly double production capacity by year-end 2012, to maintain existing capacity and to add infrastructure to support growth.
First Solar expects to generate $1 billion to $1.1 billion of operating cash flow during 2011.
Rob Gillette, CEO, Jens Meyerhoff, CFO and President, Utility Systems Group, and Bruce Sohn, President will be on the call, which we'll cover and update in this space in real time.
Updates from conference call:
According to Rob Gillette, the CEO, in 2011, First Solar will:
- Increase capacity about 45 percent to 2.0 gigawatts
- See an 8 percent to 10 percent increase in conversion efficiency (the firm did not provide specific conversion efficiency numbers).
- Continue to have a cost advantage of 30 percent over c-Si
- Build large 100-megawatt-plus, utility-scale projects
- See the North American business grow in percentage relative to Germany
- Spend approximately $1B to build new lines
- Margin guidance is flattish with 2010
The standard FSLR message was repeated: the company will be moving from existing markets to transition to sustainable markets in 2020. The need is to get to ten cents to twelve cents per kilowatt-hour, and that entails module pricing but also the intricacies of the power plant and EPC.
The company will have 26 production lines at the end of 2011:
- a 4-line plant in Vietnam (Vietnam was chosen for a variety of reasons, including tax consequences and supply chain; it is an "excellent location for one of our factories.")
- Ongoing selection process underway for a new 4-line factory in the U.S.
- French factory status uncertain
- 1,430 megawatts in Malaysia
- 477 megawatts in Germany
- 238 megawatts at the existing plant in the U.S.
The firm has been free cash flow positive since its IPO and that will continue through 2011.