First Solar, Inc. Under Investigation Concerning Possible Accounting Irregularities

An investigation on behalf of investors in First Solar (NasdaqGS: FSLR) over Securities Laws violations in connection with possible accounting irregularities at First Solar was announced.

According to the investigation by a law firm the investigation focuses on reports of possible accounting irregularities at First Solar (NasdaqGS: FSLR). First Solar launched its initial public offerings in November 2006. According to an October 2, 2009 article in Barron’s, Gordon Johnson, a securities research analyst at Hapoalim Securities, warned in a research note issued to clients that First Solar may be guilty of “aggressive revenue recognition.” The Barron’s article further reported that Johnson questioned the “longer term quality of the industry’s growth” and noted that “[w]hen growth slows for industries . . . the participants often resort to what [Johnson] calls financial chicanery to hide the slowdown and that’s what [Johnson] expects from solar tech companies.”

According to the Barron’s article, Johnson questions revenue trends, including when companies’ cash flow from operations is less than new income for multiple quarters. Johnson noted that: This is the case for First Solar (FSLR), which has reported smaller cash flow from operations compared to new income for the last two quarters after cash flow exceeding net income prior to that.

First Solar, Inc reported in 2007 Total Revenue of $503.98million with a Net Income of $158.35million and in 2008 Total Revenue of $1.2463billion with a Net Income of $348.33million. Shares of First Solar (FSLR) recently traded at $114.19 per share, down from its 52weekHigh of $207.51 per share and over $300 in 2008. First Solar, Inc., located in Tempe, Arizona, designs and manufactures solar modules using a thin film semiconductor technology. The Company’s solar modules employ a thin layer of cadmium telluride semiconductor material to convert sunlight into electricity. Each solar module is approximately 2 feet by 4 feet (60 centimeters by 120 centimeters) and had an average rated power of approximately 73 watts, during the fiscal year ended December 27, 2008.