First Solar has slightly pulled down its previous solar module shipment guidance range of 5.8 GW to 6.0 GW in 2020 due to the ‘significant uncertainty’ regarding the pandemic’s severity and continuity. The US thin film module maker has instead announced a ‘limited guidance that it believes is largely within its control at this time’ which now is in the middle of the former range at 5.9 GW DC shipments, comprising 5.7 GW of Series 6 and 200 MW of Series 4.

The main reason behind the guidance change is the delay First Solar expects in selling 3 large projects that it hoped to sell during second half of 2020 – these are 150 MW Sun Streams in Arizona, US, 123 MW American Kings Solar in California, US and 59.5 MW Ishikawa in Japan.

Management now hopes for its operating expenses to be between $340 million to $360 million, including $50 million to $60 million of start-up expenses, and capital expenditures of $450 million to $550 million.

Having said that, its Q1/2020 went relatively well as the company reported net sales of $532 million at the same levels as Q1/2019 with gross profit of 17% and net income of $91 million, compared to net loss of $68 million last year. Its net sales declined $867 million from the previous quarter mainly due to lower systems revenue from US project sales between January 2020 and March 2020. Management stressed currently its financial results have not been materially impacted by the pandemic.

As shared in late March 2020, First Solar continued operating all its manufacturing facilities in the US, Malaysia and Vietnam full steam in March 2020 and April 2020 despite impacts locally. In Malaysia though the company had to halt its Series 4 production as it was required to reduce the factory workforce in the country by 50% following administrative orders.

  Net bookings of 1.1 GW were recorded since February 2020 for Series 6, which takes overall YTD bookings to 1.8 GW. Around 700 MW of the new bookings are to be delivered during 2022 and 2023. Till May 7, 2020 total bookings for the company’s products add up to 12.3 GW.

Thomas points out, “Operationally the company appears to be running very smoothly, just the lack of clarity impact on financing of renewable assets sales gives management a pause on reaffirming guidance. “ However, Roth Capital Partners’s Justin Clare said, “Currently, FSLR’s module pricing is in the ~35c/W range; however, when the Section 201 tariff expires in early 2022, we believe pricing in the U.S. could fall closer to the global mono PERC pricing, which is already ~22-25c/W today. In that scenario, we estimate FSLR would have to reduce its cost structure to well below 20c/W to support an attractive margin, which may require faster efficiency gains.”