|Company Name:||First Solar, Inc.|
|Event Title:||Q3 2013 Earnings Call Transcript|
|Event Time:||04:30 PM ET|
Good afternoon everyone and welcome to the First Solar's Third Quarter 2013 Earnings Call. This call is being webcast live on the Investors Section of First Solar's website at firstsolar.com. At this time, all participants are in a listen-only mode. As a reminder today's call being recorded. I would now like to turn the call over to Mr. David Brady, Vice President of Treasury and Investor Relationships for First Solar Incorporated. Mr. Brady you may now begin.
Thank you operator. Good afternoon everyone and thank you for joining us. Today the company issued a press release announcing its financial results for the third quarter. A copy of the press release and the presentation are available on the Investors Section of First Solar's website at firstsolar.com.With me today are Jim Hughes, Chief Executive Officer; and Mark Widmar, Chief Financial Officer. Jim will provide an update on significant business and technology development and then Mark will discuss the third quarter results and provide updated guidance for 2013. We will then open up the call for questions.
Most of the financial numbers reported and discussed on today's call are based on U.S. Generally Accepted Accounting Principles. In a few cases where we report non-GAAP measures, we have provided a reconciliation to GAAP equivalents at the back of our presentation.Please note that during the course of this call, the company will make projections and other comments that are forward-looking statements within the meaning of the federal securities laws. The forward-looking statements in this call are based on current information and expectations and are subject to uncertainties andchanges in circumstances and do not constitute guarantees of future performance.
Those statements involve a number of factors that could cause actual results to differ materially from those statements, including the risks as described in the company's most recent annual report on Form 10-K and other filings with the Securities and Exchange Commission.First Solar assumes no obligation to update any forward-looking information contained in this call or with respect to the announcements described herein.
It is now my pleasure to introduce Jim Hughes, Chief Executive Officer. Jim?
James A. Hughes
Chief Executive Officer
Thanks David Good afternoon and thanks for joining us for our third quarter 2013 earnings call. I will begin by taking a moment to recognize some of this quarter's remarkable achievements. Our business development team booked 860 megawatt DC of new business compared to shipments of 406 megawatts in the quarter a ratio of over 2:1 and resulting in a year-to-date book to bill ratio of greater than one .
We had earnings per share of almost $2 on a GAAP basis significantly above expectations and due primarily to the sale of the ABW projects in Canada and the commencement of revenue recognition for the Desert Sunlight project.We are now flash-testing modules in our Perrysburg facility with a conversion efficiency of 14.1%. Such results have the potential to open up new business segment to us and significantly increase our total addressable market.
Then finally at a time when others are no longer reporting module cost per watt we've had the largest quarterly decline in our cost per watt since 2007, falling $0.08 to $0.59 on average in Q3 and in line with our competitors report cost per watt for what excluding break, recycling and warranty charges our core figures as now below $0.50, $0.49 to be exact, the lowest in the industry.
These results are an impressive validation of the technology and cost road maps that we provided during our Analyst Day in April and upon which we will continue to execute.Slide five shows the chart that we presented on Analyst Day which compares our module efficiency roadmap to that of utility-scale crystalline and silicon based on our estimate from a combination of our own and third-party analysis. Both roadmaps are normalized for real world operating temperatures at 60 degree celsius and adjusted for their respective temperature coefficients.
As you can see, the gap between cadmium-telluride and CSi is all that flows virtually eliminating the so called utility-scale down to systems penalty. More importantly with our steeper efficiency roadmap we expect to have surpassed the performance of CSi by mid-2014 thereby gaining a significant performance advantage in the future and at the same time further improving our intrinsic manufacturing cost advantage.
In summary, this has been a very impressive quarter. But it also demonstrates the lumpiness of our business especially in terms of revenue and earnings tied to our projects. For this reason we continue to recommend that investors focus on the long term trend and average results of the company rather on individual quarters. Now turning to the book to bill performance.
Slide six and seven show the total outstanding bookings in gigawatts and revenue and the change in those bookings that occur year-to-date. This data represents our total business which includes a relatively small percentage of third party module sales in addition to our advanced systems project pipeline. Total outstanding bookings rose from 2.6 gigawatts DC to 2.7 gigawatts DC year-to-date and our book-to-bill ratio is greater than one. The ratio for the quarter was closer to 2:1 due to the successful closer of the number of deals we have been working on in the past few months.
In September, we announced the acquisition of the Moapa project in Nevada from K Road Power. This 250 megawatt AC project is in an advance stage of development and has a 25-year PPA in place with the Los Angeles Department of Water and Power. Construction of the project could start as soon as the fourth quarter of 2013 and be completed by the end of 2015.The purchase of Moapa in addition to the Element pipeline announced on last quarter's call are examples of the use proceeds for project in pipeline acquisitions which we indicated in connection with the equity offering in June. We also recently entered into an agreement with NextEra to build the McCoy project at 250 megawatt AC solar power plant and Riverside County, California. Construction is expected to begin in 2014 with completion in late 2016.
In addition we have sign and agreement to build four solar power plants in California totaling 79 megawatts AC. All of the projects will incorporate First Solar's RayTracker technology which provides us to 20% more energy and reduces the levelized cost of electricity.Construction on all four projects is expected to be completed by late 2014. We also added 39 megawatts AC of demand from BELECTRIC.