UPDATE 1-A123 sees deep Q4 loss; eyes cost cuts
DETROIT, March 1
DETROIT, March 1 (Reuters) - A123 Systems Inc expects to report its largest quarterly loss to date after Fisker Automotive, one of its largest customers, cut battery orders and lowered sales projections for the Karma, its flagship vehicle.
The lithium-ion battery maker disclosed on Thursday that it expects to post a fourth-quarter net loss of $85 million and revenue of $40.4 million when it reports earnings on March 8.
A123's fourth-quarter loss includes a write-down of $11.6 million on its roughly $23 million investment in Fisker. A123 said it will not participate in a subsequent round of financing for Fisker, an electric car maker that was founded in 2007.
The lithium-ion battery maker also said it was seeking to expand its customer base and cut costs. A123 expects no single customer to account for more than 15 percent of revenue in 2012.
"While we dealt with a number of factors in the fourth quarter that impacted both revenue and costs, we have taken actions to address these issues," CEO David Vieau said.
Both A123 and Fisker received funding from the U.S. Department of Energy, as part of the Obama administration's push to create more green jobs in the United States.
Fisker, which recently named a new CEO, is now renegotiating the terms of its $529 million DOE loan after missing several launch dates for the Karma, its plug-in hybrid.
A123, which developed as a start-up at the Massachusetts Institute of Technology, received a $249 million grant from the Department of Energy to fund battery production in Michigan.
Making battery packs for the Karma represents a significant portion of A123's revenue, Waltham, Massachusetts-based A123 has said in regulatory filings.
Fisker handed its first Karma to actor Leonardo diCaprio last summer. Pop idol Justin Bieber was gifted a Karma for his 18th birthday on Thursday.