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First Solar’s Profits Impacted by Heavy Restructuring Charges

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Oct. 2 2017, Published 5:12 p.m. ET

Pre-tax loss

First Solar’s (FSLR) pretax loss in 2016 was $471.7 million, compared with a profit of $519.8 million in 2015. The loss could be attributed to the huge $729 million restructuring pre-tax charges faced by the company in the fourth quarter of 2016.

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Net loss in 2016

First Solar reported a net loss of $358.0 million in 2016, compared with a net profit of $546.4 million in 2015. First Solar’s net income per share in fiscal 2016 was -$3.48, compared with $5.37 in fiscal 2015.

First Solar is included in the S&P 500 (SPY) and the Guggenheim Solar ETF (TAN). First Solar’s portfolio weight in TAN is 9.5%. Other constituents of TAN include Canadian Solar (CSIQ) (5.1%), JinkSolar (JKS) (4.2%), and SunPower (SPWR) (3.4%).

Cash flow

Cash from operating activities was reported to be $206.7 million in 2016, a substantial increase from the -$325.2 million seen in 2015. The rise was primarily due to fewer solar power projects being under development in 2016. Construction requires a considerable amount of liquidity. First Solar’s 2017 guidance for cash flow from operations is $850 million–$950 million. In 2016, First Solar’s capital expenditure was $229.5 million, up from $166.4 million in 2015. Its 2017 capital expenditure guidance is $400 million–$500 million. Free cash flow was -$22.7 million in 2016, up from -$527.4 million in 2015. In the next part of our series, we’ll take a look at First Solar’s debt and liquidity profile.

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