American Superconductor (AMSC) announced its second-quarter fiscal 2010 ending September 30, 2010. Operating earnings of 22 cents per share fell short of the Zacks Consensus Estimate by one cent. However, earnings in the reported quarter comfortably beat the year-ago earnings of 11 cents per share.
Operational Statistics
American Superconductor’s total revenue of $101.5 million in the reported quarter was 36% above $74.1 million in the year-ago period and also exceeded the Zacks Consensus Estimate by $0.5 million. This growth was primarily driven by higher contribution from its Power Systems segment, along with lower contribution from the Superconductors segment.
Power Systems segment’s revenue rose 37.3% to $98.5 million in the reported quarter while Superconductors’ segmental revenue of around $3 million contributed 3.7% to growth.
American Superconductor’s gross margin for the reported quarter was 40.7% compared to 38.9% in the year-ago quarter. The company generated net income of $10 million compared with net income of $4.3 million in the prior-year quarter.
American Superconductor reported a backlog of $956 million as of September 30, 2010, compared with $952 million as of June 30, 2010.
Financial Update
Cash and cash equivalents as of September 30, 2010, were $52.6 million versus $86.8 million as of September 30, 2009. Cash used in operating activities during the first half of fiscal 2010 was $1.9 million versus $21.7 million of cash generated from operating activities in the year-ago period.
Guidance
American Superconductor increased the revenue forecast for fiscal 2010 to a range of $430 million–$440 million from the previous range of $420 million–$430 million. The company also raised its EPS forecast to a range of 95 cents–$1.00 from the earlier guidance range of 85 cents–90 cents.
Our Take
Devens, Massachusetts-based American Superconductor 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 also offers a host of smart-grid technologies for power grid operators that enhance the reliability, efficiency and capacity of the grid, and seamlessly integrate renewable energy sources into the power infrastructure. These include superconductor power cable systems, grid-level surge protectors and power electronics-based voltage stabilization systems.
American Superconductor’s core areas of expertise include megawatt-scale wind turbine designs and electrical control systems, along with a host of smart grid technologies for power grid operators to increase reliability, efficiency and capacity of the grid, apart from seamlessly integrating renewable energy sources into the power infrastructure. Its expertise in growth areas resulted in the company registering its fifteenth consecutive quarter of sequential revenue growth in the reported quarter.
We currently have a short-term Zacks #2 Rank, which translates into a Buy recommendation on the stock.
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