American Superconductor Corporation (AMSC) received initial wind turbine electrical control system orders from Dongfang Turbine Co. Ltd., the third largest wind turbine manufacturer in China. American Superconductor will be shipping the electrical control systems to Dongfang Turbine in 2011.
The wind turbine electrical control systems, designed by and jointly developed with American Superconductor, will be used in Dongfang’s 3 megawatt and 5 megawatt full conversion wind turbines. Dongfang intends to begin volume shipments of these multi-megawatt wind turbines in 2012. Dongfang, in its effort to maintain its leadership position, is launching these new multi-megawatt wind turbines.
American Superconductor’s growth potential is based on its strong Chinese exposure, and growing international operations. American Superconductor’s alliance with Dongfang will, to that end, aid in growth. Also, looking forward the company is on the fast track to growth, focusing on the rapidly growing areas of wind energy and smart grid infrastructure technology.
American Superconductor’s earnings of 33 cents per share in third-quarter fiscal 2010 ending December 31, 2010 were 6 cents, ahead of the Zacks Consensus Estimate and a substantial 21 cents above the year-ago earnings.
In its fiscal third quarter conference call, American Superconductor raised its EPS forecast to a range of 99 cents–$1.04 from the earlier guidance range of 95 cents–$1.00. However, the company reaffirmed its revenue forecast for fiscal 2010 ending March 31, 2011, to a range of $430 million–$440 million.
The Zacks Consensus Estimate for fiscal fourth-quarter 2010 is 32 cents per share. For full fiscal years 2010 and 2011, the Zacks Consensus Estimates are, respectively, $1.18 per share and $1.41 per share.
We maintain our long-term “Neutral” recommendation on American Superconductor. The quantitative Zacks #3 Rank (short term Hold rating) for the company indicates no clear directional pressure on the stock over the near term.
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. It competes with ZAGG Incorporated (ZAGG) and Electrovaya Inc.
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