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UPDATE 2-A123 Systems Q3 loss wider than expected
November 9, 2011 / 12:11 PM / 6 years ago

UPDATE 2-A123 Systems Q3 loss wider than expected

* Q3 loss/shr $0.51 vs est. loss of $0.38/shr

* Q3 rev up 145 pct to $64.3 mln

Nov 9 (Reuters) - A123 Systems posted a wider-than-expected quarterly loss as higher costs hurt its gross margins, and the developer of lithium-ion batteries for hybrid cars said it expects quarterly gross margins to break even in 2012.

A123, which cut its 2011 revenue outlook last week after customer Fisker Automotive reduced orders, said it has taken actions to address near-term challenges associated with the volume decline.

“We are making progress on our cell-cost reduction strategy, and we expect to reduce our cash burn,” Chief Executive David Vieau said in a statement.

The cost of battery packs needed for upcoming plug-in electric vehicles has been seen as one of the major hurdles to their widespread adoption.

For the third quarter, A123 reported a quarterly loss of $63.7 million, or 51 cents a share, compared with a loss of $43.7 million, or 42 cents a share, a year ago.

Revenue rose to $64.3 million from $26.2 million a year ago. Gross margin was negative 30.4 percent.

Shares of the company, founded by scientists linked to the Massachusetts Institute of Technology, closed at $3.16 Tuesday on Nasdaq.

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