First Solar, a U.S.-based manufacturer of solar modules, has released its financial results for the third quarter of 2021 (Q3 2021). The firm’s net sales in Q3 2021 stood at $584 million, 7.3%, down from $629 million in Q2 2021. In a year-over-year (YoY) comparison, net sales were down 37% from $928 million in Q3 2020.

An increase in the module segment revenue partially offset the decrease in sales in Q3 2021.

The firm’s operating income for Q3 2021 stood at $51 million, down 59.5% from $110 million in Q2 2021. Third-quarter operating income included depreciation and amortization of $66 million, underutilization and production start-up of $9 million, and share-based compensation of $6 million.

Net income dropped to $45 million in Q3 from $82 million in the previous quarter, a decrease of  37%, and from $155 million in Q3 2020, a YoY decrease of 110%.

The company had a record year-to-date net bookings of 10.5 GW (January to November 2021), and net bookings since the previous earnings call were 1.5 GW.

At the end of Q3, cash equivalents, restricted cash, and marketable securities totaled $1.9 billion, a decrease of $111 million from the prior quarter. The company attributed the drop to capital expenditures and reinvestment of restricted cash, which was partially offset by operating cash flows and collection of accounts receivables related to legacy systems activities.

First Solar claimed that sales freight reduced module segment gross margin by 12% in Q3. Even though the 2021 sales freight guidance remained unchanged, the company expects the elevated freight costs to be a potential headwind to the 2022 result. A portion of the expected 2022 deliveries had contractual sales freight cost-sharing provisions with its customers, it said.

The freight market experienced record schedule delays and reliability issues, the company noted. About 820 MW of modules remained in transit at the end of the quarter, not taken as revenue for  Q3 2021.

The company said that it had managed to maintain capacity utilization of over 100% despite the challenging pandemic environment in South East Asia.

“In the third quarter, we produced 2 GW of modules, and in October, we increased our top production bin to 465 watts,” said Mark Widmar, CEO, First Solar.

“In parallel, we started constructing the building for our third Ohio factory and began ordering equipment for our first factory in India. Commercially, we had a good quarter, increasing our record year-to-date bookings to 10.5 GW. From a financial standpoint, while extended transit times for ocean freight impacted our third-quarter results, we are reiterating our 2021 EPS guidance,” he added.

In Q1 2021, First Solar’s net sales touched $803.4 million, increasing $194 million from the previous quarter. In a year-over-year comparison, the net sales were up 51%. The company had then said that it aimed to reach a nameplate module manufacturing capacity of 8.7 GW and 9.4 GW by the end of 2021 and 2022, respectively.

Recently, First Solar announced that it would invest $684 million to set up a vertically integrated photovoltaic (PV) 3.3 GW thin-film solar module manufacturing facility in India.  The company also commenced the construction of a 3.3 GW module manufacturing facility in Ohio.