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Zoltek Will Be Back

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Carbon fiber materials specialist Zoltek (Nasdaq: ZOLT  ) went down for the count yesterday, laid low by a terrible fourth-quarter report.

The Street had expected a $0.02 net loss per share on about $43 million in sales, reflecting 28% higher revenue than the year-ago period. That sounds like a low hurdle to clear when you consider that the company serves the red-hot green energy market with materials for wind turbines, but that's not how it turned out at all. Instead, sales actually fell by 8% to $31 million, though the net loss ended up smaller than expected at just $0.01 per share.

Management pointed an accusing finger at largest customer Vestas Wind Systems (OTC BB: VWDRY.PK), which closed down several turbine manufacturing plants in Europe during the quarter in order to shift manufacturing lines into Asia and the United States.

Vestas stands for roughly half of Zoltek's sales, so any change in that customer's order patterns will have serious consequences for Zoltek. Since the turbine wrangler is simply moving from one geography to a couple of others, this impact should be short-lived. However, these shifts hurt in the near term, as any investor in solid-state drive designer STEC (Nasdaq: STEC  ) will tell you -- STEC's largest customer, storage systems builder EMC (NYSE: EMC  ) , curtailed its ordering of new STEC components this year, causing STEC's sales to plummet and the stock to collapse. This is the same kind of thing, only draped in carbon fibers rather than next-generation storage technologies.

At the end of the day, Zoltek is a small company with a volatile stock. Larger rival Hexcel (NYSE: HXL  ) has become expensive over the past year, while Zoltek hasn't. If you're willing to live with roller-coaster volatility, and you believe Zoltec can reach consistent profitability, then buying in on dips like these could provide a nice entry point.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.

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