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First Solar of Toledo, Ohio posts 1st profit in 20-year history

February 18th, 2007 by kalyan89 in Press Releases, Reports, SC Company Reports

By Julie M. McKinnon, Toledo Blade Business writer /February 14, 2007
Source: Toledo Blade

Toledo-born First Solar Inc. was in the black for the first time in its two-decade history last year, with profits of $4 million, or 7 cents a share. The Phoenix solar panel manufacturer, which has its sole factory in Perrysburg Township, had sales of $135 million last year. That was an increase of 181 percent from 2005, when sales were $48.1 million and the firm had a loss of $6.5 million.

The company was able to make a profit last year as it sold its first public stock and began constructing a smaller plant in Germany. The European factory will open in the second half of this year. “In 2007, we’re building on those successes,” Michael Ahearn, chief executive, told analysts and investors during a conference call yesterday.

First Solar expects to have $310 million to $340 million in sales this year, but profitability will depend on start-up costs in Germany, the company warned. A Malaysian factory also is under way and will be open by mid-2008 to produce solar panels used to generate electricity.

Stock in the rapidly expanding company closed at $34.28 a share on the Nasdaq market yesterday, up $1.18 a share. Germany has been a market for the firm since 2003, and Spain emerged last year as another possibility, Mr. Ahearn said. Other countries where First Solar could sell its solar panels include Italy, Greece, France, Canada, and South Korea, and potential U.S. customers include utility, commercial, and industrial operations, he said.

Although the company is not bidding on a Wal-Mart Stores Inc. project geared toward system producers, the firm’s panels certainly could be used on roofs of those and other retail stores, Mr. Ahearn said. Before its annual financial results were released, U.S. Secretary of Energy Samuel W. Bodman toured the company’s suburban Toledo plant and met with employees.

Solar energy is a major part of President Bush’s push for finding alternative energy sources, Mr. Bodman said. The administration wants to spend $2.7 billion to help find energy sources in the upcoming fiscal year, including $150 million on solar initiatives, he said.

First Solar and its predecessor, Solar Cells, over the years have received $19 million in federal funding, which has been put to good use, Mr. Bodman said. Solar Cells was founded in the late 1980s by the late Toledo investor and industrialist Harold McMaster.

The Bush administration expects solar energy will be cost competitive with fossil fuels by 2015, Mr. Bodman said. “I’m sure our friends here at First Solar would say they can beat that,” he said. “I hope they can.” George “Chip” Hambro, the company’s chief operating officer, said its technology to make energy panels from thin coatings over special glass has cost advantages over competitors using silicone. Its process requires cheaper raw materials, and overhead and manufacturing expenses also are lower, he said.

For the fourth quarter, First Solar had a profit of $8 million, or 12 cents a share, up from a loss of $7.2 million a year earlier. It had sales of $52.7 million for the three-month period, up 288 percent from a year earlier.

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