May 7 (Bloomberg) -- First Solar Inc., the largest U.S. solar manufacturer, reported net income that was more than double estimates, largely the result of revenue from a 139- megawatt power plant in California.
About 65 percent of the company’s revenue comes from building and selling utility-scale solar farms. That strategy depends on signing new deals as it completes construction on projects that power companies have already agreed to buy.
Chief Executive Officer Jim Hughes said he’s achieving that goal, and increasing interest from utilities in other countries will help the Tempe, Arizona-based company keep its project pipeline filled.
The company has identified 12.2 gigawatts of potential new contracts over the next few years, with 59 percent coming from projects outside the U.S. and “widespread utility scale interest in the U.S.,” Hughes said yesterday during a conference call.
“That gives us confidence we can replace our pipeline into 2016 and beyond.”
Net income in the first quarter rose to $112 million, or $1.10 a share, from $59.1 million, or 66 cents a share, a year earlier, the company said in a statement yesterday. That was more than double the 50-cent average of nine estimates compiled by Bloomberg. Sales increased 26 percent to $950.2 million.
Much of the increase in revenue came from the 139-megawatt Campo Verde solar farm in southern California, according to the statement. First Solar sold it in April 2013 to Southern Co. and Ted Turner’s clean-power company Turner Renewable Energy LLC.
The company increased its earnings forecast for the year, to $2.40 to $2.80 a share, from a March estimate of $2.20 to $2.60 a share. The shares have gained 23 percent this year.
Demand for First Solar’s power plants is increasing, according to Vishal Shah, an analyst at Deutsche Bank AG in New York.
“Activity levels in the U.S. utility scale segment are picking up and First Solar is gaining traction at a number of these customers,” Shah said in a April 30 note to clients. He has a hold rating on the shares.