American Superconductor Corporation
) reported results for its first quarter fiscal 2012 ending June
30, 2012. In the reported quarter, the company incurred an adjusted
loss of 24 cents per share, which came in line with the Zacks
Consensus Estimate. Loss in the reported quarter was better than
the year-ago quarterly adjusted loss of 68 cents per share.
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On a reported basis, the company digested a net loss of 20 cents
per share versus a net loss of 74 cents per share, which included
aggregate one-time asset write-downs, impairments and accrued
In the reported period the variance of 4 cents between reported and
adjusted earnings was due to the effect of adverse purchase
commitment recoveries of 14 cents. This was partially offset by 5
cents from change in fair value of derivatives and warrants; 4
cents from non-cash interest expense; and 1 cent from other items.
American Superconductor's total revenue of $28.7 million in the
reported quarter rose more than two-fold versus the year-ago
quarterly revenue of $9.1 million. Reported quarterly revenue was
also higher than the Zacks Consensus Estimate of $28.0 million. The
revenue upside was driven by strong growth in both the Wind and
Grid reporting segments. American Superconductor digested a net
loss of $10.3 million in the reported quarter versus a net loss of
$37.7 million in the year-ago period.
Cash and cash equivalents as of June 30, 2012, were $60.5 million
versus $46.3 million as of March 31, 2012. Cash used in operating
activities during the three-month period ending June 30, 2012, was
$11.6 million versus $57.8 million of cash used in operating
activities during the three-month period ending June 30, 2011.
Founded in 1987, Boston, Massachusetts-based American
Superconductor has operations spread in Asia, Australia, Europe and
North America. The company offers an array of proprietary
technologies and solutions spanning the electric power
infrastructure, including generation to delivery to end-use. The
company is a lead player in megawatt-scale wind turbine designs and
electrical control systems.
American Superconductor's performance was impacted by business and
contractual issues with its largest customer in China - Sinovel
Wind Group Co. Ltd. Earlier, American Superconductor's revenue
growth largely relied on its customer Sinovel, China's largest and
the world's third largest wind turbine manufacturer. However, since
April 2011, Sinovel bogged down by high inventory levels refused to
accept further shipments from the company and was unable to pay for
American Superconductor sued Sinovel in November 2011, for payments
for past shipments, and compensation for infringement of
intellectual property rights. American Superconductor alleges that
Sinovel illegally obtained and used its proprietary technology to
upgrade its 1.5 megawatt wind turbines to meet proposed Chinese
grid codes. The matter is now sub-judice, with American
Superconductor seeking to recover more than $1.2 billion from
Sinovel through civil cases filed in various Chinese courts.
American Superconductor, looking forward to the quarter ending
September 30, 2012, expects that its revenues will exceed $20
million. The company expects that its net loss for that quarter
will be less than $22 million, or 43 cents per share. The company
also estimates that it will have more than $70 million in cash,
cash equivalents, marketable securities and restricted cash on
September 30, 2012.
In the near term, the Zacks #2 Rank (Buy) clearly suggests a window
for short-term gains. Over the longer run however we maintain our
market Neutral recommendation on the American Superconductor stock.
American Superconductor competes with