Effectively immediately, Rob Gillette is no longer chief executive officer at First Solar, which just sent out a terse press release stating chairman and company founder Mike Ahearn will serve as interim CEO.
No further explanation was offered. Shares of the solar energy technology seller have now declined 21%, or $13.19 to $45.69.
The sector, which benefits from federal funding for alternative energy projects, has been under scrutiny following a Congressional inquiry into the financing of�Solyndra, which declared bankruptcy in August.� House Republicans have sought information on loan guarantees given to First Solar (FSLR) and SunPower (SPWRA).
First Solar said its board has formed a committee to search for a permanent chief exec.
Update: Citi Analyst Timothy Arcuri notes that Gillette is out after only two years, and that only one of the top six corporate officers listed in the 2008 10K, the general counsel, remains.
Arcuri thinks First Solar may need to lay off 10% of its workforce as it reduces factory utilization in the next several quarters, and this may have led to the management change.
“Pricing checks support very low �core� EPS in the near term. Our work indicates customers are pushing back hard on prior contracts … specifically, at least two large customers are indicating to us they will only stand by volume commitments if FSLR�s module pricing is in the $0.75-0.80/W range when pricing resets in the first half of 2012. This leaves very little room for FSLR�s operating expenses and implies �core� EPS could approach zero during this period, depending on where final pricing negotiations shake out.”
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