Not that much time has passed since we last talked about First Solar (ticker: FSLR).
It was the topic of our "Major Market Move" post on March 22nd after the stock price was down 27% for the month. The news about the company was bad then and unfortunately it continues to be so. FSLR is down 41.1% for the year making it the worst performer in the S&P 500.
What we neglected to mention in that previous article was that FSLR had a disastrous calendar 2011 4th quarter. The company lost $4.78/share and revenues were down 35% QOQ. The losses for that one quarter wiped out all of the earnings for the previous three.
Not surprisingly, the company recently announced it was downsizing. Two thousand workers are being layed off (30% of its total workforce) along with a factory closing in Germany and production lines being idled in Malaysia.
According to this article from the LA Times, the dismantling of subsidies in Europe, a direct effect of the European crisis and austerity measures, is putting a significant dampener on the solar business.
"After a period of robust growth, First Solar is scaled to operate at higher volumes than currently exist following the reduction of subsidies in key legacy markets," interim Chief Executive Mike Ahearn said in a statement.
Europe, formerly a clean-energy leader, is suffering from lapsed interest amid the region's financial crisis. Add an influx of cheap Chinese panels in recent years, and First Solar (along with many other makers of solar photovoltaics) found itself with a serious shortfall in demand.
"It is clear the European market has deteriorated to the extent that our operations there are no longer economically sustainable," Ahearn said.
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