Given the state of the solar industry, with its pricing competition and oversupply, First Solar’s positive results for the third quarter of 2012—it reported earnings per share for the quarter of $1.27 per share, besting analysts average estimates of $1.04 per share—it may be a rarity among publicly traded solar companies. The company attributed the positive quarter on a number of factors, including starting to recognize revenue from the Topaz Solar Farm and increased manufacturing utilization.

First Solar’s manufacturing utilization in the third quarter, reached up to 83 percent capacity across its plants, up sharply from 63 percent in the second quarter of 2012. “This plant increase was in response to stronger demand, in addition the high-utilization rate was partially driven by the benefit of completed upgrades on various lines in Perrysburg and Malaysia,” said First Solar CFO Mark Widmar during its earnings call. “During Q4, we plan to run our plant at approximately 90 percent to 95 percent capacity utilization, thus continuing to minimize underutilization headwinds.” Still, the company plans to completely shutter at least one facility, it’s Frankfurt Oder facility in Germany, after the fourth quarter of 2012.

Since it’s previous COE left the company abruptly last year, First Solar has made changes to its future growth strategy, moving from manufacturing-centric company with a project development component to a project-centric business model, observed Raymond James Equity Analyst Pavel Molchanov. In a research note he said the company is shifting its focus from the U.S. to emerging markets, like India, Southeast Asia and the Mid-East. “This is taking place amid an erased cost advantage for thin film due to ultra-depressed (and still falling) crystalline prices. Balancing these challenges with an enviable balance sheet (especially compared to Chinese competitors), we maintain our market perform rating.”

Molchanov said the results and direction of the company was positive. “First Solar will almost certainly be the only PV module maker with positive GAAP EPS this earnings season. And here is something we haven't seen nearly enough in the space lately: a meaningful earnings beat coming entirely from gross margin,” Molchanov said.

Despite the positive quarter First Solar anticipates that margins will tighten in the future as it works reduce its levelized cost of electricity (LCOE) to remain competitive. “In order to continue our progress in the markets we are targeting, we need to be prepared to price solar electricity at levels sufficient to generate new demand without the benefit of subsidies. The principal driver of our cost roadmap is conversion efficiency but more importantly, to lower our LCOE to the targeted range of $100 to $140 per megawatt hour. We have invested heavily in our R&D team to drive genuine improvements,” said CEO James Hughes. Some of those changes are already coming online, but more will come online in 2013 and into 2014.

Upon the results, Molchanov tightened its guidance for the full year. “All-in, we are tweaking our 4Q12 EPS estimate from $1.86 to $1.78, with 2013 moving lower as well from $3.67 to $3.53,” he said in the note.