First Solar Inc. intends to lay off more than one-quarter of its staff and to restructure operations to focus on newer solar modules, which will lead to at least $500 million in charges and push the company into the red this year.
The restructuring, announced Wednesday in response to steep price declines and lower demand in China, includes about 1,600 layoffs out of the company’s 6,000 workers in the U.S. and abroad.
To account for the transition to the newer modules along with uncertainty over the new administration’s energy and tax policies, Chief Financial Officer Alexander R. Bradley said in a conference call with analysts that 2017 production is expected to fall to 2.2 gigawatts.
In addition, company officials slashed their 2020 solar target in China to 9 gigawatts, from 20 gigawatts, to account for further projected demand declines in that country.
Shares of the Tempe, Ariz.-based company, down more than one-half this year through Wednesday’s close, fell 13% in after-hours trading to $28.55, trading at 2013 lows.
Taking into account the restructuring and asset-impairment charges, estimated at $500 million to $700 million, First Solar now projects a loss of $2 to $4 a share for the year, but raised its adjusted profit projection by 30 cents to a range of $4.60 to $4.80 a share.
Next year, it projects break-even to 50 cents a share of adjusted profit on $2.5 billion to $2.6 billion in revenue. Analysts surveyed by Thomson Reuters had projected an adjusted profit of $1.94 a share on roughly $3 billion in revenue.
Shipments, estimated at 2.8 gigawatts to 2.9 gigawatts this year, are expected to decline to a range of 2.4 gigawatts to 2.6 gigawatts in 2017, while spending on capital projects is expected to roughly double to a range of $525 million to $625 million.
Mr. Bradley, the CFO, said 2018 will be a transition year as First Solar ramps up production of the Series 6 modules in the second half of the year, targeting about 3 gigawatts of Series 6 production in 2019.
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