First Solar, Inc. recently announced preliminary financial results for the third quarter of 2015. The Company expects to release complete condensed consolidated financial results and file its Quarterly Report on Form 10-Q on or prior to November 9th, 2015.The Company is issuing preliminary results while it completes its analysis of a discrete income tax matter related to a foreign jurisdiction. The Company believes that based on its preliminary analysis, the tax matter could have an adverse financial impact of up to $40 million. Preliminary results are being issued pending the determination of the financial impact of this matter, if any.
Preliminary Financial Results
Net sales were $1.3 billion in the quarter, an increase of $375 million from the second quarter of 2015. The increase in net sales from the prior quarter resulted primarily from initial revenue recognition on the sale of a majority interest in the partially constructed Desert Stateline project. In addition revenue increased due to higher third party module sales and an increase in systems revenue across multiple projects.
The Company reported preliminary third quarter GAAP earnings per fully diluted share of $3.38, compared to $0.93 in the prior quarter. The sequential increase in net income was due to higher gross margins associated with the majority sale of the Desert Stateline project, improvements in systems project costs and a decrease in our module collection and recycling obligation, which reduced cost of sales by $70 million and operating expenses by $10 million.
Cash and marketable securities at the end of the third quarter were approximately $1.8 billion, an increase of approximately $34 million compared to the prior quarter. Cash flows from operations were $21 million in the third quarter. The increase in cash and marketable securities during the quarter was primarily due to cash received related to the majority sale of the Desert Stateline project, partially offset by continued project construction on balance sheet.
“We had tremendous execution in the third quarter from both a financial and bookings perspective,” said Jim Hughes, CEO of First Solar. “We have now exceeded our book-to-bill target for the year, booked over 1GWdc of volume with deliveries after 2016, achieved strong quarterly earnings and have significantly raised our full year earnings guidance. We remain confident in our long term strategy and our ability to execute successfully.”The Company also provided preliminary updated guidance for 2015. The following guidance is preliminary pending the determination of the financial impact of the tax matter discussed previously.