First Solar, the U.S. developer of thinfilm photovoltaic panels, has reduced its earnings estimate for this year and next year and has announced plans to cut 100 jobs.
Under its revised guidance, First Solar expects 2011 net sales to range between $2.8 billion and $2.9 billion, down from an initial range of $3.0 to $3.3 billion. Next year, First Solar forecasts net sales of $3.7 to $4.0 billion. According to Bloomberg the company had expected 2012 revenues of $4.06 billion.
The earnings’ cut reflects the challenging market conditions faced by Western solar panel makers, which are competing with a flood of cheap Chinese panels. Specific to First Solar, overproduction has also cut into the Arizona company’s revenues. To reverse the situation, last month, First Solar founder Michael Ahearn rejoined the company as interim CEO, replacing Robert Gillette, a former executive with Honeywell International’s aerospace division, who had joined the company three years earlier.
In a prepared statement First Solar’s Ahearn said the company was recalibrating its business “to focus on building and serving sustainable markets rather than pursuing subsidized markets.” He also remains optimistic about his company’s long-term success. “Our diverse business model and robust project pipeline will help First Solar generate a significant amount of cash in 2012 while improving operational efficiencies,” Ahearn explained.
While these lower costs have helped push solar generation closer to grid parity, it’s also forced a number of capital-intensive solar companies to shutdown. Just this year EverGreen Solar, Solyndra and SpectraWatt all filed for bankruptcy protection, and on Wednesday the tough market conditions pushed solar module company Solon to seek creditor protection, reports GreenTechMedia.