On February 29, 2012, the Company announced its financial results for the fourth quarter and year ended December 31, 2011. Specifically, First Solar reported a decrease of $345 million in net sales for the fourth quarter, as compared to the previous quarter, “primarily due to the timing of revenue recognition in our systems business and lower for module-only sales.” In addition, the Company disclosed various charges including a charge of $164 million for warranty payments to replace equipment that caused premature power loss in certain panels. The Company spent $125.8 million in the fourth quarter on warranty claims and has put aside $37.5 million to cover future claims.
On these revelations, First Solar shares declined $4.10 per share or 11%, to close at $32.30 per share, on February 29, 2012.
The complaint alleges that throughout the class period, defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, defendants made false and/or misleading statements and/or failed to disclose: (1) the full impact of certain manufacturing flaws on the Company’s earnings; (2) that the Company was improperly recognizing revenue concerning certain products in its systems business; (3) that the Company lacked adequate internal and financial controls; and (4) that, as a result of the foregoing, the Company’s statements were materially false and misleading at all relevant times.
On behalf of all persons who purchased or otherwise acquired the publicly traded common stock of First Solar, Inc. (“First Solar” or the “Company”)