First Solar CEO to step down, shares plummet
Wednesday, October 26, 2011
NEW YORK (AP) — The CEO of the nation's largest solar company is out, First Solar announced Tuesday, sending its shares tumbling more than 25 percent.
Rob Gillette, who took over at the company two years ago, becomes the latest in a series of high-level departures at First Solar Inc., based in Tempe, Ariz.
First Solar would say only that Gillette was "no longer serving as chief executive officer."
His exit comes, however, as some of the highest-profile companies in the sector find themselves under a congressional microscope.
GOP critics have called for ending solar loan guarantees since a one-time industry favorite and recipient of a half-billion-dollar loan, Solyndra LLC, sought bankruptcy protection in September. The government granted loan guarantees to First Solar projects this year under the same program that provided Solyndra's loan.
A First Solar spokesman wouldn't comment further about Gillette's departure. Shares fell $14.68, or 25.33 percent, to $43.27 per share — the biggest one-day drop in company history, according to FactSet.
Avian Securities analyst Mark Bachman said investors fled as the company refused to explain the decision.
"We don't know if he was fired, or if he left under his own accord," Bachman said. "There's just an air of uncertainty around this company now."
In August and September, First Solar received three federal loan guarantees totaling $3 billion under the same program that paid for the $528 million loan to Solyndra.
First Solar sold each of the projects to major utilities but still plans to develop and operate them. Damien LaVera, a spokesman for the Energy Department, said the loans were made to the project, rather than to a company, which means that the project owner ultimately is responsible in case of problems.
LaVera said the DOE remains confident in the loans.
Board Chairman and company founder Mike Ahearn will take over temporarily as CEO, overseeing an executive team that has seen plenty of change recently. Bruce Sohn resigned as president of operations in April, and utility systems chief Jens Meyerhoff announced that he was leaving in August.
Gillette, 51, a former chief executive at Honeywell Aerospace, was hired to steer the company as the entire industry headed into a tough period. Rising competition from Chinese manufacturers and a drop in panel prices slashed profits throughout the industry.
Two other panel manufacturers have joined Solyndra in filing for bankruptcy in the last two months.
In its latest financial report, First Solar said it sold more panels than during the same period last year, but its profit dropped 62 percent as its prices fell.
Gillette remained outwardly positive, telling investors that better times were ahead for the solar industry. Germany, Italy and other European countries that make up the biggest market for solar panels appeared to be "bouncing back" from the continent's financial crisis, he said.
"I think we will see some stability in the markets," Gillette said in August. "I think in Europe we are still kind of all bouncing back."First Solar is expected to release its third-quarter results next week.
Associated Press Writer Matthew Daly contributed to this story from Washington, D.C.
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