It's never a great idea to report a decline in sales, but when you report a loss that's nearly as big as your market cap you have to wonder what the future holds. Such is the case for American Superconductor (Nasdaq: AMSC ) , the embattled supplier of wind turbine technology and inverters to the renewables market.
Yesterday, the company reported fiscal-fourth-quarter sales of $28.6 million, down from $59.8 million a year earlier, due primarily to the loss of Sinovel. Sales were up from $18.1 million in the third quarter, however, so at least the trend is positive sequentially.
On the bottom line the company reported a quarterly loss of $21.2 million, or $0.42 per share, and an annual loss of $185.1 million.
The grid business was the one semi-bright spot for American Superconductor as revenue rose slightly year over year. The company is trying to expand in the inverter market for renewable systems, but the competition has been fierce and competitors like Enphase Energy (Nasdaq: ENPH ) and Power-One (Nasdaq: PWER ) have seen their stock prices fall because of uncertainty in the market. There are just too many inverter suppliers in the market right now and margins and sales are being squeezed by competition.
The big question for American Superconductor now is whether the company can survive. The company was able to line up a $10 million loan recently and as much as $40 million in financing but the cost has been high. The most recent loan comes with an 11% interest rate and includes warrants to purchase shares.
Operations just aren't strong enough to make this stock a value, either. Cost cuts have helped the company reduce losses, but obviously there's a long way to go. Recent orders like the 100-MW order from Inox Wind will help, but unless American Superconductor somehow wins its lawsuits in China the future doesn't look very bright.