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UPDATE 1-First Solar profit hit by choppy revenue from projects

Tuesday, 25 Feb 2014 | 5:10 PM ET

* 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

Feb 25 (Reuters) - U.S. solar company First Solar Inc reported a lower-than-expected quarterly profit and forecast weak first-quarter earnings, hit 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.

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 on Tuesday.

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.

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 a collection of solar projects in Ontario, Canada to an investment partnership led by GE Energy Financial Services during the third quarter.

First Solar's 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 expectation of 99 cents per share.

First Solar shares were trading at $51.05 in extended trading after closing at $58.03 on the Nasdaq.

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