First Solar, Inc. (NASDAQ:FSLR) Q2 2018 Earnings Conference Call - Final Transcript

Jul 26, 2018 • 04:30 pm ET

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First Solar, Inc. (NASDAQ:FSLR) Q2 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good afternoon, everyone, and welcome to First Solar's Second Quarter 2018 Earnings Call. This call is being webcast live on the Investors section of First Solar's website at firstsolar.com. [Operator Instructions]

I would now like to turn the call over to Steve Haymore from First Solar Investor Relations. Mr. Haymore, you may begin.

Executive
Stephen Haymore

Thank you, Abby. Good afternoon, everyone, and thank you for joining us.

Today, the company issued a press release announcing its second quarter financial results. A copy of the press release and associated presentation are available on First Solar's website at investor.firstsolar.com.

With me today are Mark Widmar, Chief Executive Officer; and Alex Bradley, Chief Financial Officer. Mark will begin by providing a business and technology update. Alex will then discuss our financial results for the quarter and provide updated guidance for 2018. Following their remarks, we'll then have time for questions. Please note this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to review the Safe Harbor statements contained in today's press release and presentation for a more complete description.

It is now my pleasure to introduce Mark Widmar, Chief Executive Officer. Mark?

Executive
Mark R. Widmar

Thanks, Steve.

Good afternoon, and thank you for joining us today. I would like to start by discussing the global PV market.

As you are aware, since our last earnings call, there has been significant developments in the global market, primarily stemming from policy decisions in China. The near-term impact has been an almost immediate collapse and probably seen across the crystalline silicon supply chain. While we have seen planned maintenance pull forward or other actions taken to better align near-term supply with demand, there's still an oversupply across the value chain which is driving declining module ASPs in both China and certain international markets.

While it's still too early to fully assess the long-term effect these decisions will have on industry as a whole, the end result most likely will be more competitive PV power prices which will lead to demand elasticity both in China specifically and the global market in general. Additionally, we will likely see industry consolidation as uncompetitive technologies and financially unstable companies struggle to compete.

While we will continue to carefully monitor these recent developments, we remain focused on leveraging our competitive advantages and executing our differentiation strategy. First and foremost, our cad-tel technology and specifically our Series 6 product is a competitive advantage. In an industry that suffers from a lack of differentiation, Series 6 has the potential to achieve a distinctive combination of low cost and high efficiency. While there is still a great deal of work ahead to realize its full potential, our unique technology is a key competitive advantage.

In addition, as we look over the horizon of an oversupplied market, our nearly 11-gigawatt pipeline of future contracted shipments is a position of strength. While I will talk more about this in a moment, nearly 80% of our