First Solar 2017 sales forecast misses; to slash 27% jobs

First Solar Inc.
Source: First Solar

First Solar forecast 2017 sales well below analysts' estimate, and the company said it would slash about 1,600 jobs, or 27 percent of its global workforce, as it transitions to a new product ahead of schedule.

Shares of the largest U.S. solar equipment maker were down 11.6 percent at $28.95 in extended trading on Wednesday. If the current losses hold, the stock set to open at a more than three-year low on Thursday.

The company said it would bring forward production of its Series 6 modules by a year to 2018 and abandoned plans for the Series 5 product.

First Solar originally expected the Series 5 and 6 products to be on the market at the same time.

Chief Executive Mark Widmar said earlier this month that if the company cannot reduce the cost of the Series 5, it will speed up the introduction of the next-generation Series 6.

First Solar, which will phase out Series 4 module later this year, said it expected about 3 Gigawatts (GW) of Series 6 production in 2019.

The company expects to see a shift in profitability as Series 6 comes online in the second half of 2018, First Solar executives said in a conference call on Wednesday.

First Solar forecast a loss per share for 2016, compared with a profit estimate earlier, mainly due to charges related to the restructuring.

The Tempe, Arizona-based company said it now expected a loss per share of $2 to $4 in 2016, compared with earnings of $3.75-$3.90 forecast earlier.

First Solar said it expected pretax restructuring charges of $500 million to $700 million, anticipated primarily in the fourth quarter of 2016.

The company forecast 2017 net sales of $2.5 billion to $2.6 billion, well below analysts' average estimate of $2.98 billion, according to Thomson Reuters I/B/E/S.

First Solar said it expected to ship 2.4 to 2.6 GW in 2017, compared with the 2.8 to 2.9 GW shipments it estimated for 2016.

The company warned earlier this month of significant challenges next year due to a 30 percent slide in prices, driven by lower demand in China and the resulting oversupply of panels globally.

Customers have delayed signing contracts in hope of further price declines and the company also passed on some deals because they did not make economic sense, company executives said in its post-earnings conference call on Nov. 2.

Shares of the company, like those of its rivals, came under pressure after Donald Trump's stunning victory in the U.S. presidential election.