Yahoo Finance Analyzing First Solar’s Project Pipeline and Liquidity Position
What Do Analysts Expect from First Solar's 1Q16 Earnings?
First Solar’s advanced project pipeline
Revenues of upstream solar (TAN) companies like First Solar, SunEdison (SUNE), SunPower (SPWR), Trina Solar, and Canadian Solar (CSIQ) largely depend on the completion of their existing project pipeline and their future project bookings.
According to company filings, as of February 23, 2016, First Solar had about 3.8 GW (gigawatts) of systems business in the advanced stage project pipeline. As of December 31, 2015, the projects sold or under contract in the advanced stage project pipeline include ~1.6 GW. Out of 1.6 GW, First Solar has recognized revenue of ~0.9 GW. The rest is expected to be recognized in fiscal 2016.
First Solar’s mid-stage project pipeline
First Solar intends to grow its revenue through actively developing its mid-stage project pipeline and through the acquisition of new projects in the advanced stage. For investors, it’s important to look out for a company’s new bookings along with the addition to its advanced stage project pipeline from its mid-staged projects.
As of December 31, 2015, projects with executed PPA not sold or not contracted included ~2.18 GW. According to company filings, the volumes of modules installed in Megawatt DC (direct current) will be 1.2–1.3 times higher than MW AC (alternate current) depending on project-specific design factors.
Liquidity position
The upstream solar industry is a capital intensive industry. It’s very important for incumbent companies to maintain their liquidity position to raise capital at lower rates.
As of December 31, 2015, First Solar had $1.8 billion in cash, cash equivalents, and marketable securities—compared to $2.0 billion as of December 31, 2014. The decrease is primarily due to financing the construction company’s new solar projects.
Browse this series on Market Realist:
