* Q2 EPS ex-items 70 cents vs Wall St view of 92 cents
* Revenue falls 9 percent to $532 million
* Cuts full-year profit forecast to $9.00-$9.50/share
* Shares fall 2.7 pct in post-market trading
(Adds analyst comment, details on margins, bylines)
By Matt Daily and Nichola Groom
NEW YORK/LOS ANGELES, Aug 4 First Solar Inc
(FSLR.O) posted lower-than-expected quarterly profit and cut
its 2011 forecast as slack demand in Europe hit prices for its
Global solar module demand has suffered this year as
declines in subsidies in key European markets hurt sales, even
as First Solar and rivals such as Suntech Power Holdings Co Ltd
STP.N and Trina Solar Ltd TSL.N expand production.
That has taken a toll on First Solar's shares, which have
dropped 17 percent so far this year and closed at their lowest
level of 2011 on Thursday amid the broad U.S. market selloff.
Still, one analyst said the cut to the profit forecast was
not as deep as some market-watchers had expected, largely
because of the company's plans to build several large solar
power plant projects.
"The full-year results actually hold up pretty well. That's
based on the fact that they have a lot of internal pipeline to
work with," said John Hardy, analyst Gleacher & Company.
Net income for the second quarter fell to $61 million, or
70 cents per share, from $159 million, or $1.84 per share, in
the year-ago quarter.
That was well short of the 92 cents per share that analysts
had expected, according to Thomson Reuters I/B/E/S.
In a conference call with analysts, Chief Executive Rob
Gillette acknowledged the weak solar market picture, but
maintained that business would improve.
"It was a challenging quarter for the solar PV industry,
including First Solar," he said. "We are positioned for a
better second half."
Earlier on Thursday, Sempra Energy announced it would buy
First Solar's expansion of the Copper Mountain solar power
plant in Nevada. [ID:nN1E7731KL]
Revenue fell 9 percent to $533 million, also below the $582
million that Wall Street forecast.
Even with its reduced forecast for 2011, the final six
months of the year are still expected to generate more than
three times the profits of the first half of the year.
First Solar trimmed its full-year earnings per share
outlook range to between $9 and $9.50 from a previous range of
$9.25 to $9.75 per share.
It also cut its sales view to $3.6 billion to $3.7 billion
from a prior view of $3.7 billion to $3.8 billion.
The company is also cutting back plans for capital spending
and manufacturing and factory start-up costs.
Operating cash flow for the year is expected to be between
$500 million and $600 million, down from $800 million to $1
First Solar's second-quarter gross profit margin shrank to
36.6 percent from 45.8 percent in the first quarter, as its
average selling prices dropped by 13 percent.
Its production of solar modules grew 19 percent to 489.2
The Tempe, Arizona-based company is the lowest cost
producer of the photovoltaic modules that turn sunlight into
Its production cost was flat with the first quarter at 75
cents per watt, including share-based payment costs and costs
to increase production.
First Solar shares fell 2.7 percent in post-market trading,
after dropping 6.3 percent to $107.94 during the regular
(Reporting by Matt Daily and Nichola Groom; editing by Gary
Hill, Andre Grenon and Matthew Lewis)