Stock Analysis on Net
Stock Analysis on Net

First Solar Inc. (NASDAQ:FSLR)

This company has been moved to the archive! The financial data has not been updated since October 29, 2024.

Common-Size Income Statement

First Solar Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net sales 100.00 100.00 100.00 100.00 100.00
Cost of sales -60.81 -97.33 -75.03 -74.90 -82.07
Gross profit 39.19% 2.67% 24.97% 25.10% 17.93%
Selling, general and administrative -5.95 -6.29 -5.83 -8.22 -6.71
Research and development -4.59 -4.31 -3.39 -3.46 -3.15
Production start-up -1.95 -2.79 -0.72 -1.49 -1.50
Litigation loss -1.07 0.00 0.00 -0.22 -11.85
Operating expenses -13.57% -13.39% -9.94% -13.40% -23.21%
Gain on sales of businesses, net 0.21 9.68 5.04 0.00 0.00
Operating income (loss) 25.83% -1.04% 20.07% 11.71% -5.28%
Foreign currency income (loss), net -0.65 -0.63 -0.27 -0.18 0.07
Interest income 2.94 1.27 0.21 0.61 1.60
Interest expense, net -0.39 -0.47 -0.45 -0.89 -0.88
Other income (expense), net -0.88 1.19 0.01 -0.44 0.57
Income (loss) before taxes and equity in earnings (losses) 26.86% 0.33% 19.57% 10.81% -3.92%
Income tax (expense) benefit -1.82 -2.01 -3.54 3.96 0.18
Equity in losses, net of tax 0.00 0.00 0.00 -0.08 -0.01
Net income (loss) 25.03% -1.69% 16.03% 14.69% -3.75%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The financial trajectory between 2019 and 2023 is characterized by significant volatility in gross margins and net profitability, with a notable recovery in the final period. Net income margins transitioned from a deficit of -3.75% in 2019 to a peak of 25.03% in 2023, despite a temporary contraction in 2022.

Gross Profitability and Cost Structure
A dramatic fluctuation in the cost of sales is observed, peaking at 97.33% of net sales in 2022, which compressed the gross profit margin to a period low of 2.67%. This trend reversed sharply in 2023, where the cost of sales dropped to 60.81%, resulting in a record gross profit margin of 39.19%. Prior to the 2022 decline, margins remained relatively stable between 17.93% and 25.10% from 2019 to 2021.
Operating Expense Management
Selling, general and administrative expenses have remained consistently controlled, fluctuating within a narrow band between 5.83% and 8.22% of net sales. Research and development costs show a slight upward trend, increasing from 3.15% in 2019 to 4.59% in 2023. A significant impact on operating results was noted in 2019 due to a litigation loss representing 11.85% of net sales, a factor that largely subsided in subsequent years, with a minor reappearance of 1.07% in 2023.
Operating Income and Non-Operating Gains
Operating income margins exhibit high variance, moving from -5.28% in 2019 to 20.07% in 2021, before falling to -1.04% in 2022 and rebounding to 25.83% in 2023. In 2022, the operating loss was partially mitigated by a gain on sales of businesses, which contributed 9.68% to net sales, preventing a deeper decline in pre-tax income.
Net Income and Tax Impact
Net income margins mirror the volatility of operating income, with a sharp dip to -1.69% in 2022. Tax benefits provided a moderate cushion in 2019, while tax expenses of approximately 1.82% to 3.54% of net sales were recorded from 2020 through 2023. Interest income improved significantly in 2023, reaching 2.94% of net sales, contributing to the overall bottom-line expansion.

The analysis indicates a strong capacity for margin expansion in the most recent period, offsetting previous operational headwinds and non-recurring losses. The reliance on non-operating gains in 2022 suggests a temporary instability in core production costs that was successfully resolved by 2023.

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