UPDATE 3-American Superconductor upbeat on China wind mkt boom
* Q2 adj EPS $0.19 vs est $0.13
* Revenue up 85 pct
* Raises full-year outlook
* Shares up 23 pct (Adds details, CEO and analyst comments, updates share movement)
By Bhaswati Mukhopadhyay
BANGALORE, Oct 29 (Reuters) - American Superconductor Corp (AMSC.O), which makes electrical systems for wind farms and turbines, posted better-than-expected quarterly results, powered by a booming Chinese wind industry, a key growth driver for the company.
Shares of the energy technology company jumped 23 percent to $35.47 on heavy volumes in afternoon trade on Nasdaq.
The company also raised its full-year outlook, saying its key customer -- China's Sinovel Wind -- has asked it to accelerate shipments in the second half of the fiscal year.
Sinovel Wind accounts for about 75 percent of American Superconductor's total revenue. The company has a total of 13 customers in the wind industry, of which five are in China.
American Superconductor, though concerned about customer concentration, said, "we definitely want to be part of Sinovel as it aims to be the world's No. 1 player in the wind industry within five years."
Analyst Theodore Rudd O'Neill of Kaufman Bros said Sinovel is setting up operations in the UK and the U.S., American Superconductor will benefit from its partnership with Sinovel when the stimulus money flows into the U.S. wind turbine business.
However, the Chinese wind industry will remain the key driver of American Superconductor's growth.
"The approach also is to bring in additional customers and as they start to grow, that will dilute Sinovel as a percentage of our revenue," Chief Executive Greg Yurek told Reuters.
For the full year, the company forecast earnings of 59 cents to 64 cents a share, excluding items, up from its prior forecast of 41 cents to 47 cents a share.
American Superconductor, which also offers smart grid infrastructure technologies, forecast full-year revenue of $300 million to $310 million, up from its previous view of $260 million to $270 million.
"We expect to increase revenue quarter-over-quarter through the remainder of fiscal 2009," Chief Financial Officer David Henry said in a statement.
Analyst Vijay Singh of Janco Partners said, "the most important thing is the company needs to build the backlog because if the backlog starts to shrink and there is only one customer, then customer concentration becomes even more pronounced."
American Superconductor is also part of the Tres Amigas renewable energy market hub, which will enable buying and selling of electricity between the three U.S. power grids. [ID:nBNG526685]
The power trading hub is right now in the early stages of development and there are many hurdles to overcome.
"When construction begins in 2012 and we start supplying key components to the Tres Amigas superstation, we would hope to see revenue coming at that stage," the CEO said. Analysts, however, expect the project to take long to bear fruit.
Q2 TOPS STREET
For the second quarter ended Sept. 30, the company reported net income of $4.3 million, or 10 cents a share, compared with a net loss of $4.1 million, or 10 cents a share, a year ago. Excluding items, it earned 19 cents a share.
Revenue rose 85 percent to $74.7 million.
Analysts on average were expecting earnings of 13 cents a share on revenue of $69.0 million, according to Thomson Reuters I/B/E/S.
In addition to the $100 million electrical component contract with Sinovel, second-quarter bookings included electrical system orders from several other wind turbine customers and power grid sales in Australia, China, the United Kingdom and the United States, the CEO said. (Reporting by Bhaswati Mukhopadhyay; Editing by Vinu Pilakkott and Pradeep Kurup)
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