UPDATE 2-First Solar profit hit by choppy revenue from projects

Tue Feb 25, 2014 5:49pm EST

* 4th-quarter adj profit $0.89 /share vs est.$0.99

* Sees 1st-quarter profit of $0.50-$0.60/share vs est. $0.84

* Shares down 12 pct

By Swetha Gopinath

Feb 25 (Reuters) - U.S. solar company First Solar Inc reported a lower-than-expected quarterly profit and forecast weak first-quarter earnings, hurt by irregular revenue from its solar projects.

The solar panel maker's shares, which have gained three-quarters of their value in the past year, slipped 12 percent after the bell on Tuesday.

First Solar has focused on building utility-scale solar projects in the United States to offset weak panel prices, caused by a glut in Chinese production and a sharp fall in European consumer subsidies for solar energy.

The company generates over 80 percent of its revenue from selling power plants to utilities, but analysts have raised concerns about the company's revenue recognition pattern.

"First Solar's earnings are hyper-choppy due to project revenue recognition," Raymond James analyst Pavel Molchanov said.

First Solar said it expects to earn between 50 cents and 60 cents per share on net sales of $800 million to $900 million in the first quarter.

Analysts on average were expecting the company to earn 84 cents per share on revenue of $898.3 million, according to Thomson Reuters I/B/E/S.

"These first-quarter numbers ... are not indicative of the full-year profile as we expect to receive proceeds from the sale of projects under construction at a later portion of the year," Chief Financial Officer Mark Widmar said on a conference call with analysts.

Total sales fell 29 percent to $768 million in the fourth-quarter ended Dec. 31, mainly due to lower revenue from its solar projects business.

First solar said project revenues fell in the quarter, mainly because it recorded initial revenue from its 550-megawatt (MW) Desert Sunlight project in California during the third quarter ended Sept. 30.

The company also sold solar projects in Ontario, Canada to an investment partnership led by GE Energy Financial Services during the third quarter.

First solar said there were some projects where it did not book revenue in the fourth quarter and that it would start to recognize sales from those projects in 2014.

The company, like its rivals SunEdison Inc and SunPower Corp, also said it was evaluating a yield co -- a public entity that would hold a bunch of existing solar power plants.

Net income fell to $65.2 million, or 64 cents per share, in the fourth quarter ended Dec. 31, from $154.2 million, or $1.74 per share, a year ago.

Excluding a $24.9 million charge related primarily to a write-down of the value of an idle facility in Vietnam, adjusted profit was $89 cents per share, below the average analyst estimate of 99 cents per share.

First Solar shares were trading at $51.08 after the bell.