The battery industry is a world of turmoil right now, and when Valence Technology
For the fiscal fourth quarter, things couldn't have been much better. Revenue exploded to $13.9 million from $3.9 million a year ago. Gross margins expanded to 21% from 12%, and net loss was just $2.5 million, or a shiny penny per share. But that's where the good news ends.
A123 Systems announced this month that it had signed a deal with Smith Electric, one of Valence's biggest customers. Even Valence doesn't know how Smith's dual sourcing plan will work, but revenue guidance for the first quarter is just $8.5 million to $10.5 million without Smith. There's an upside if Smith does come through with orders in the quarter, but there will likely be a big decline in revenue sequentially.
Lots of questions, few answers
What was once a promising group of companies has now become a game of dodging landmines for investors. Advanced Battery Technologies
I'm still waiting to see which company emerges as the winner before buying into these stocks. The champion might hit a gold mine, but as we've seen, there are land mines it will have to avoid before getting there.
Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.
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