First Solar profit falls, cuts 2011 forecast

First Solar Inc has posted lower-than-expected quarterly profit and cut its 2011 forecast as slack demand in Europe hit prices for its thin-film panels. Global solar module demand has suffered this year as declines in subsidies in key European markets hurt sales, even as First Solar and rivals such as Suntech Power Holdings Co Ltd and Trina Solar Ltd expand production.That has taken a toll on First Solar’s shares, which have dropped 17 per cent so far this year and closed at their lowest level of 2011 on Thursday amid the broad US market selloff. Still, one analyst said the cut to the profit forecast was not as deep as some market-watchers had expected, largely because of the company’s plans to build several large solar power plant projects.“The full-year results actually hold up pretty well. That’s based on the fact that they have a lot of internal pipeline to work with,” said John Hardy, analyst Gleacher & Company.Net income for the second quarter fell to $61 million, or 70 cents per share, from $159 million, or $1.84 per share, in the year-ago quarter.That was well short of the 92 cents per share that analysts had expected, according to Thomson Reuters I/B/E/S.In a conference call with analysts, Chief Executive Rob Gillette acknowledged the weak solar market picture, but maintained that business would improve.“It was a challenging quarter for the solar PV industry, including First Solar,” he said. “We are positioned for a better second half.”Earlier on Thursday, Sempra Energy announced it would buy First Solar’s expansion of the Copper Mountain solar power plant in Nevada. Revenue fell 9 per cent to $533 million, also below the $582 million that Wall Street forecast.Even with its reduced forecast for 2011, the final six months of the year are still expected to generate more than three times the profits of the first half of the year.First Solar trimmed its full-year earnings per share outlook range to between $9 and $9.50 from a previous range of $9.25 to $9.75 per share.It also cut its sales view to $3.6 billion to $3.7 billion from a prior view of $3.7 billion to $3.8 billion. The company is also cutting back plans for capital spending and manufacturing and factory start-up costs. From / Gulf Today