American Superconductor Drops on Wider Loss, Lower Forecast

American Superconductor Corp., a U.S. maker of wind-turbine parts, fell the most in more than two months after reporting a wider loss in its fiscal third-quarter and lowering its forecast.

AMSC fell 7.6 percent to $5.57 at the close in New York, the biggest decline since Nov. 21. Net loss for the three months ended Dec. 31 increased to $26.3 million, or 52 cents a share, from $18.2 million, or 38 cents, a year earlier, the Devens, Massachusetts-based company said today in a statement. Sales fell 43 percent to $18.1 million.

Fourth-quarter revenue is expected to exceed $27 million, AMSC said. That’s short of the figure the company provided during an earnings call with analysts in November, when it said sales would surpass $15 million in the third quarter and then “double going into the fourth quarter.”

“The fiscal fourth quarter looks modestly disappointing, at about $27 million, when they said it would be at least $30 million,” Carter Driscoll, a Capstone Investments analyst in Miami who rates the shares a “hold,” said by telephone today.

The company expects a net loss of 47 cents a share in its fiscal fourth quarter, 10 cents more than the average of eight analysts’ estimates compiled by Bloomberg.

Sinovel Suit

About $6.5 million of the third-quarter loss was due to the company’s lawsuit against Sinovel Wind Group Co., formerly its largest customer, and for costs “related to the workforce reduction that was announced in November,” the company said in the statement.

“The organizational changes we have made provide us with confidence that we will post sequential growth and will reduce our cash usage in the fourth fiscal quarter,” Chief Executive Officer Daniel McGahn said in the statement.

The company said it has sufficient cash to fund its operations for at least 12 months.

The U.S. supplier contends that Beijing-based Sinovel, China’s largest turbine maker, is illegally using its intellectual property. A former AMSC employee pleaded guilty to charges including economic espionage in an Austrian court in September and said Sinovel paid him to share proprietary information.

Sinovel stopped accepting or paying for contracted shipments March 31.

AMSC said Feb. 6 it’s appealing a decision by a Chinese court to dismiss a lawsuit against Sinovel. A court in Hainan Province dismissed its claim for $200,000 in damages related to copyright infringement, the smallest among three civil suits seeking more than $1.2 billion from Sinovel.

“That’s a huge black box right now, knowing how that’s going to proceed,” Driscoll said.

The Sinovel dispute interfered with AMSC’s bookkeeping and the company failed last year to file its annual report on time because it was reviewing revenue from Chinese contracts.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE