First Solar - $FSLR - Earnings Analysis: Strong revenue growth and profitability in 2024.
Business Model
First Solar generates revenue primarily through the sale of photovoltaic (PV) solar modules.
Revenue Sources
- Net sales for the fourth quarter were $1.5 billion, an increase of $0.6 billion from the prior quarter, primarily due to increased module sales.
- Net sales for the full year 2024 were $4.2 billion, compared to $3.3 billion in the prior year, primarily driven by a higher volume of modules sold to third parties.
Income Statement Analysis
- Net sales increased by 70.56% from Q3 2024 to Q4 2024, driven by higher module sales.
- Cost of sales increased by 114.03% from Q3 2024 to Q4 2024.
- Operating expenses decreased by 10.07% from Q3 2024 to Q4 2024.
- Net income increased by 25.61% from Q3 2024 to Q4 2024.
Balance Sheet Analysis
- Total assets increased by 16.97% from 2023 to 2024.
- Total stockholders' equity increased by 19.29% from 2023 to 2024.
- Total liabilities increased by 12.76% from 2023 to 2024.
Cash Flow Analysis
- Net cash provided by operating activities increased significantly in 2024 compared to 2023, primarily due to proceeds from the sale of Section 45X tax credits.
- Net cash used in investing activities also increased due to capital expenditures.
- The net cash balance decreased year-over-year.
Capital Allocation
The company is focused on expanding domestic U.S. manufacturing capacity in Alabama and Louisiana and has commissioned a new R&D innovation center in Ohio. The company expects to be able to finance their currently announced capital programs without requiring external financing.
Management Commentary
In 2024, we continued building the foundations required for our long-term growth strategy.
Even as we maintained a highly selective approach to bookings, we expanded manufacturing capacity by commissioning our Alabama facility and progressed construction of our new Louisiana facility.
There remains significant near term uncertainty, largely driven by the still unresolved policy environment following the U. S. Elections in November.
we've made the decision to reduce output of Series six international product from our Malaysia and Vietnam factories by a combined total of one gigawatt this year
Overall Sentiment: Cautiously optimistic, focused on long-term growth and navigating near-term uncertainties.
Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.