First Solar stock falls as CEO departsWritten by Duane Ramsey | | firstname.lastname@example.org
First Solar’s stock (NASDAQ: FSLR) took a tumble with the sudden resignation of its CEO Rob Gillette announced by the company Oct. 25.
First Solar stock opened at $58.11 per share on Tuesday and closed at $43.27, a 25-percent drop in one day, the biggest decline since the company’s initial public offering in November 2006.
First Solar shares lost a quarter of their value and fell to the lowest level since 2007. The company’s board of directors asked its founder and chairman Mike Ahearn to serve as interim CEO and he accepted the offer.
The board has formed a search committee and is initiating a search for a permanent chief executive officer, according to the announcement.
No reason was given for Gillette’s immediate departure, but the board thanked him for his service in a statement. Gillette had served as CEO since Oct. 1, 2009.
With respect to Gillette’s departure, Ahearn stated, “We thank Rob for his service, but the board of directors believes First Solar needed a leadership change to navigate through the industry turmoil and achieve our long-term goals.”
The company’s stock was selling for as high as $175 per share in February 2011 but has declined steadily throughout the year.
“It’s going down by what’s going on in the market and a drift away from solar energy more than a CEO stepping down but it certainly doesn’t help the situation there,” said Dock David Treece of the Treece Investment Advisory Group and a regular columnist for the Toledo Free Press.
One analyst noted than only one of the top six corporate officers listed in First Solar’s 2008 annual report remains with the company.
The solar industry is in poor shape hit by weak demand, low prices, and too many solar panels being made in China, according to a Dow Jones report.
First Solar announced its financial results for the third quarter that ended Sept. 30, 2011 that were originally scheduled for release Nov. 3.
The company reported net sales of $1 billion in the third quarter, an increase of $473 million from the second quarter 2011 and up from $798 million in the third quarter of 2010.
Third quarter net income per fully diluted share was $2.25 up from $0.70 in the second quarter of 2011 and from $2.04 in the third quarter of 2010.
“First Solar’s performance in the quarter reflects our superior technology, strong execution capacity, and integrated business model, all of which have enabled us to weather a difficult market environment relatively well,” Ahearn stated in the company’s announcement of its earnings.
“Going forward, our goal is not just to survive the current environment, but to transcend it by creating and expanding markets worldwide that do not depend on today’s subsidy programs. This requires that we re-focus our strategy and commit our resources to solving the pressing energy needs that exist in much of the world,” he concluded.
First Solar employs more than 1,000 workers at its manufacturing facilities in Perrysburg upon completion of a 2010 expansion project to increase production at that location.
First Solar is headquartered in Tempe, Ariz. and operates manufacturing facilities in Perrysburg, Ohio; Frankfurt (Oder), Germany; and Kulim, Malaysia. The company, founded in 1999, employs more than 6,400 associates worldwide.