Could the Partnership with GE push First Solar to New Highs?
Mumbai, India -- (SBWIRE) -- 10/25/2013 -- Tempe, Arizona-based First Solar, Inc. (FSLR) announced a major deal on October 16, 2013 with a subsidiary of NextEra Energy Resources, LLC to construct a 250 MW solar power plant in Riverside County, California. Construction is expected to begin in late 2014, with completion in late 2016. This follows a series of deals First Solar has been involved in over the last three months.
NextEra Energy Resources is a subsidiary of NextEra Energy, Inc., which had in excess of $14 billion in revenues in 2012. As of March this year, they possessed 17,771 megawatts of generating capacity in both the U.S. and Canada.
This deal follows an even bigger partnership agreement announced in August between First Solar and GE. The agreement entails First Solar acquiring all of GE's cadmium telluride (cad-tel) solar intellectual property with GE in turn receiving 1.75 million shares of FSLR stock. GE currently is a significant player in the renewable energy space with 34 gigawatts of capacity installed globally. Its cad-tel research cell holds the efficiency record at 19.6% with First Solar’s standing at 18.7%.
As part of the deal, GE would stop working on the buildout of its Aurora, Colorado manufacturing facility, and would instead directly buy GE-branded modules from First Solar at agreed upon pricing for future global GE deployments. This could turn out to be a positive move for First Solar since any benefits of future growth and expansion which GE achieves would then be passed on to First Solar. Another benefit of the partnership would be joint R&D work in advancing and further developing cad-tel solar technology later. From being viewed earlier as a competitor to them, GE has now become a large investor in First Solar.
Speaking at their Q2 results call in August, First Solar’s CEO Jim Hughes said that having a company of GE's stature invest and partner with them was a tremendous validation of cad-tel solar tech and their manufacturing expertise and they were excited about potential benefits this would mean for future development of their technology and prospects for their business. Later in response to a question on the call, he also noted that they contemplated seeing a near-term benefit through the deal with access to GE’s salesforce.
Earlier in September, First Solar announced that it had acquired the Moapa Solar Project in Nevada from K Road Power Holdings. The project has total generating capacity of 250 megawatts with a PPA or Power Purchase Agreement with the Los Angeles Department of Water and Power (LADWP).
The deals the company has been announcing over the last three months have without a doubt led to the FSLR stock touching new highs. Though the stock had stayed within the $35 to $40 range post its Q2 results, it has been on an upward trend since early October, reaching a new high of $54.22 at close on October the 24th. The next upward spike or downward drop could be expected on the 31st of October, once Q3 results are out.
Interestingly, the price movement appears to be unaffected by their lowering of full year 2013 revenue to between 3.6 billion to 3.8 billion from the previous range of 3.8 billion to 4 billion. However, the above contract wins and the GE deal clearly signal the company’s aggressive approach to both short and long-term growth.
First Solar would be reporting Q3 results on Thursday the 31st of October, followed by a conference call in which they would go over their results in greater detail.
Earnings Impact Launches Ideaz
Ideaz are a collection of articles on currently trending stocks and topics which are making headlines. Certain articles provide you a graphical perspective of reasons behind why a company or its product stays in the news.
About Analyz Thiz
Analyz Thiz helps you understand the correlation between the time when a company’s conference call transcript is available and the effect it has on its stock price at that point in time.
About Editor’s Picks
The latest feature on Earnings Impact is Editor's Picks, where a selection of game-changing transcripts are listed which explain why those companies are in the news.
About Earnings Impact
Earningsimpact.com is the destination for Transcripts of events that could impact stocks and its stakeholders. Transcripts are posted on earningsimpact.com within 2 hours of the live event. Active investors and traders will get access to this vital information much before the market reacts.
Copyright © 2005-2013 - SBWire, The Small Business Newswire - All Rights Reserved - Important Disclaimer
Contact Us: 888-4-SBWIRE (US) - 920-593-5640 (International)