Thin-film giant First Solar’s results for the First quarter were far under analysts’ expectations. The company has been retooling for a while since oustering its former CEO last fall, but the company now is moving forward with a new CEO, James Hughes, and working towards a five-year strategy based on markets that aren’t reliant on incentives.

“Last week NRG Energy and Mid-America celebrated Agua Caliente's first 100 MW being delivered to the grid, making it North America's largest PV plant in operation,” said Chief Financial Officer Mark Widmar. With projects like that in various stages of completion, you’d think the company behind them would be doing swimmingly, but it’s not according to it’s first quarter results. In all First Solar reported revenue of $497 million for the first quarter and net loss of $5.20 per share, compared to a net income of $1.33 per share in the previous year’s quarter and a net loss of $4.78 per share in the fourth quarter of 2011.

The company’s revenue for the quarter was 38 percent below Raymond James Equity Research’s expectations, for example. “The much lower sales figure comes partly from lower module-only sales, though of course average selling price (ASP) declines continue to hold the entire industry hostage. As a result, gross margin was a paltry 15.4%, barely half our 28.7% estimate, down from 21% in 4Q and just one-third of what it had been a year earlier,” Raymond James analyst Pavel Molchanov wrote in a research note.

The company’s troubles were compounded by having to replace defective panels last year. Widmar said those issues have been resolved during the company’s results call.

How the company will fare going forward will largely depend on executing it’s five-year plan. Chairman Mike Ahern said the commoditized supply chain will lead to cycles of over-investment and excess capacity in the future. That and declining subsidies, were impacting the market.

“This has resulted in a dramatic drop in near term demand in some markets. This basic imbalance between supply and demand required First Solar to seek a new strategy for delivering growth that can be sustained over a long period,” he said. “Our strategy is to develop new sustainable markets by providing utility-scale solar power to regions in the world that are blessed with an abundance of sun and a need for peak electricity.”

The new CEO, Jim Hughes, has his work cut out for him, but he has international experience international energy markets and was formerly CEO of energy company AEI. He said he’s ready for it. “Exactly this difficulty makes it an interesting opportunity for the company and the marketplace. I believe the rapid cost reduction that occurred leaves solar at the threshold of taking it's place as a mainstream part of the power generation complex,” he said.