First Solar Names James Hughes CEO, Reports First-Quarter Financial Losses


First Solar Inc. has appointed James Hughes CEO. Hughes succeeds Mike Ahearn, First Solar's founder and chairman, who has been serving as interim CEO since October 2011. Ahearn will continue in his role as chairman of the board.

Hughes joined First Solar in March as chief commercial officer and has nearly 20 years of experience in the global energy industry. Before joining First Solar, he served as CEO of AEI, which owned and operated power distribution, conventional and renewable power generation, natural gas transportation and natural gas distribution businesses. Prior to his work at AEI, he was president and chief operating officer for Prisma Energy.

Additionally, the company has named Raffi Garabedian chief technology officer. He replaces Dave Eaglesham, who has retired.

The executive changes were made as First Solar announced its first-quarter financial results, which included a drop in net sales.

The company reported $497 million in sales in the quarter – a decrease of $163 million from the fourth quarter of 2011. According to First Solar, this change was primarily caused by lower average selling prices and lower volumes for module-only sales, which was partially offset by higher systems revenue.

The first-quarter net loss was $5.20 per fully diluted share, compared to a net loss of $4.78 per fully diluted share in the fourth quarter of 2011 and net income of $1.33 per fully diluted share in the first quarter of 2011. First Solar said its recent restructuring initiatives contributed to these losses.

‘First Solar's performance in the quarter was impacted by an aggressive competitive environment resulting from persistent supply-demand imbalances in the market, as well as restructuring costs that will improve our operating efficiency and help position us for the future,’ Ahearn added in a statement.

Deutsche Bank analyst Vishal Shah warned that improvement may not be immediate for First Solar.

‘We believe management is taking the right steps in providing a five-year strategic plan with focus on utility-scale markets, where the company currently anticipates limited competition from c-Si suppliers,’ Shah said in a research note. ‘But we note that it would take a long time for these markets to develop, especially as risk-averse utility customers adopt a wait-and-see approach.

‘We expect strategic JV announcements to act as next headline catalysts, but with meaningful financial impact unlikely until 2014-15 timeframe at the earliest, it may be too early to step in,’ he added.

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