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UPDATE 3-AMSC ups FY profit view, to lower dependence on Sinovel
February 1, 2011 / 12:46 PM / 7 years ago

UPDATE 3-AMSC ups FY profit view, to lower dependence on Sinovel

* Q3 adj EPS $0.40 vs est. $0.33

* Q3 rev up 42 pct, beats market

* SEES FY adj EPS outlook to $1.33-$1.38

* Says to lower dependence on Sinovel in “several years”

* Shares rise 11 percent (Recasts; adds conference call comments, updates shares)

BANGALORE, Feb 1 (Reuters) - American Superconductor Corp (AMSC) (AMSC.O) raised its full-year profit outlook for the third time, and said it plans to reduce dependence on its main customer China’s Sinovel Wind (601558.SS).

AMSC has been trying to diversify its customer base away from Sinovel, which accounts for about three-fourths of its revenue, and also from its largest Chinese market, through new wind turbine orders and emerging power grid opportunities.

“Growth in our sales to additional wind turbine licensees in the next year and beyond, and growth of power grid sales ... will lead to Sinovel being well under 50 percent of total sales within the next several years,” AMSC founder and CEO Greg Yurek said on a conference call.

Sales to Sinovel, which buys wind turbine systems from AMSC, accounted for 73 percent of the company’s latest third-quarter revenue, down from 79 percent in the second quarter, AMSC said.

AMSC, however, sees Sinovel, the world’s third largest wind turbine maker that went public last month, to continue to pay a crucial role in its growth.

Third-quarter sales at AMSC’s power systems unit, whose competitors include ABB Ltd (ABB.N), Woodward Inc (WWD.O) and SatCon Technology Corp SATC.O, jumped 46 percent to $114.2 million, boosted by the wind systems business.

Revenue from power grid business, the emerging segment within the power systems unit, rose 60 percent to $20 million.

China, the world’s biggest adopter of renewable energy, will need a significant power grid and AMSC is eyeing that opportunity, CEO Yurek said. For the full year, the Devens, Massachusetts-based company now expects earnings of $0.99-$1.04 a share, up from its prior outlook of $0.95-$1.00 a share.

Analysts on average were expecting full-year earnings of $1.30 a share, on revenue of $439 million, according to Thomson Reuters I/B/E/S. [ID:nASA01H09]

The company’s shares were up 9 percent at $29.70 on Tuesday afternoon on Nasdaq. They touched a high of $30.27 earlier in the day. More than 2.4 million shares changed hands by 1327 ET, about three times their normal volume. (Reporting by Soham Chatterjee & Bijoy Koyitty; Editing by Unnikrishnan Nair)

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