A-Power Results Not So A-mazing

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Prior to yesterday's plunge, A-Power Energy Generation Systems (Nasdaq: APWR) had certainly been generating a lot of investor enthusiasm.

I first noted the Chinese power player's budding alliance with General Electric (NYSE: GE) back in January, right around the time A-Power cut the ribbon on its first (and China's largest) wind turbine production facility. In early March, the two companies formalized their wind turbine gearbox joint venture, which seemed to give the company some serious street cred. Meanwhile, the Street had left A-Power for dead.

From those early March lows, however, A-Power shares made a powerful run. The firm began to land some fresh deals in its distributed generation business, but as with solar compatriots like Yingli Green Energy (NYSE: YGE) and Suntech Power (NYSE: STP), I think investors have been much more focused on the future bounty of Chinese stimulus cash rather than the present level of demand. In addition to the new wind business, A-Power's small biomass-fired power plants fit China's green energy vision.

A-Power's success story hit a plot-hole yesterday. The firm (finally) reported first-quarter results, and revenue came in at just 61% of the average analyst estimate. Per-share earnings were just one-third the anticipated $0.12 figure. So why the big disconnect?

Well, I hope no one was expecting much from the new wind business, because A-Power won't be shipping its first two 2.7 MW turbines until the third quarter. Then again, following the company's rather grandiose claims made in the not-too-distant past, I wouldn't blame the average investor for expecting some sales on the wind side by now.

This is the same company that implied in February 2008 that it would manufacture hundreds of turbines by the end of this year, and talked about producing and recognizing revenue on 10 turbines in the fourth quarter of 2008.

There's plenty to like about A-Power, particularly its distributed power segment, which has generated consistent profits and faces far less competition than we see in the cutthroat solar sector. The valuation is less crazy than those sported by wind players Broadwind Energy (Nasdaq: BWEN) or American Superconductor (Nasdaq: AMSC). The firm's debt-free to boot.

But I'm more than just a bit worried about the company's big promises on the turbine side, and want to see solid execution on that front before I promote this company from the ranks of wind wannabes.

A-Power is rated a respectable four stars by the Motley Fool CAPS community. What do you think we have here: a wind wimp or a wind wizard? Weigh in here.