First Solar Reports 11% Revenue Growth in Q3 2024, 25% in Nine-Month Period, Amid Manufacturing Issues and Pricing Competition

First Solar, Inc. reported significant financial growth in its third quarter and the first nine months of 2024, driven by increased sales and improved profitability. For Q3 2024, net sales reached $887.7 million, an 11% increase from $801.1 million in Q3 2023. The nine-month figures also showed robust growth, with net sales of $2.69 billion, up 25% from $2.16 billion in the same period last year. This growth was primarily attributed to a 9% increase in module sales volume and $72.3 million in termination payments from customer contract terminations, although it was partially offset by a $50 million revenue reduction due to manufacturing issues.

Gross profit for Q3 2024 was $445.3 million, an 18% increase from $376.2 million in Q3 2023, with gross profit margins improving to 50.2% from 47.0%. For the nine months ended September 30, 2024, gross profit surged to $1.29 billion, a 62% increase compared to $798.6 million in the same period of 2023. Operating income for Q3 2024 was $322.0 million, up from $273.0 million in Q3 2023, while net income for the quarter rose to $313.0 million from $268.4 million year-over-year.

The company’s total assets increased to $11.44 billion as of September 30, 2024, up from $10.37 billion at the end of 2023. However, cash and cash equivalents decreased significantly to $1.01 billion from $1.95 billion, primarily due to capital expenditures for new facilities and operating expenses. First Solar's total stockholders' equity also rose to $7.59 billion, compared to $6.69 billion at the end of 2023.

Strategically, First Solar has been expanding its manufacturing capabilities, including the recent commencement of Series 7 module production at its Alabama facility, contributing to a total installed production capacity of approximately 19.4 GW. The company is also constructing a fifth manufacturing facility in the U.S., expected to begin operations in the second half of 2025, with an investment of approximately $0.9 billion.

In terms of challenges, First Solar identified manufacturing issues affecting certain Series 7 modules, which may lead to premature power loss and are projected to result in aggregate losses between $50 million and $100 million. The company has increased its product warranty liability in response to these issues. Additionally, First Solar is navigating intense pricing competition in the solar industry, which could impact profitability.

Overall, First Solar's performance reflects a strong market position bolstered by strategic investments and operational expansions, despite facing some manufacturing challenges.