First Solar and other leading solar companies such as China's Suntech Power Holdings Co Ltd and California-based SunPower Corp are expected to report their quarterly earnings in the coming weeks.
Those figures are expected to be their brightest earnings in a year since a global glut of solar panels and lack of financing has hurt the industry.
Yet some analysts have said cash flow at those companies has lagged behind reported profit in recent quarters, which could mean the companies are using aggressive accounting and may not be able to sustain their earnings.
"If that continues, your operating results look good, but your tangible cash flow is declining because you're not collecting on your revenues. That's a formula for disaster for any company," said Gordon Johnson, an analyst with Hapoalim Securities.
First Solar attributed the lag in cash flow for the first and second quarters of 2009 — $101 million and $158 million, respectively — to several factors.
In the first quarter, the company stretched payment terms from 10 days to 45 days, a period more in line with the standard industry practice, it said, and also reflecting longer shipping times to Germany from its Malaysian factory.
That took full effect in the second quarter, putting an extra $93 million owed by customers on the books, the company said.
First Solar also said it shipped more at the end of the second quarter instead of evenly throughout the period and increased its inventory of panels headed for construction.
SunPower's cash flow from operations was $48 million and $21 million below net income for the first two quarters, while cash flow at Suntech was $2 million and $10 million below net income in first and second quarters.
Suntech and SunPower declined to comment.
China's Suntech previously said it plans to announce soon a large investor in the Global Solar Fund, a customer in which Suntech owns more than a 80-percent stake, and which accounted for more than 30 percent of its first quarter sales.