American Superconductor (Nasdaq: AMSC) is hoping that slow and steady wins the race back to viability after a turbulent 2011. The company is now into some semblance of normal operations after the bomb that Sinovel dropped on it last year, and the company's third fiscal quarter shows at least a little progress.

Revenue was $18.1 million in the quarter and net loss increased to $26.3 million, or $0.52 per share. Excluding litigation and reorganization costs the loss per share was $0.38. These results are all better than the expectations set by the company in December.

Calm days for the wind business
The wind business hasn't been stellar, not surprising considering that General Electric (NYSE: GE), Siemens (NYSE: SI), and Vestas have all reported weak wind numbers in 2011. American Superconductor's wind business reported just $10.1 million in sales for the quarter. 

Diversification from grid products is taking a larger percentage of the company's sales and has held steady quarter over quarter. 44% of sales were on the grid side, showing the diversification plan is taking hold.

Expectations getting higher
With just $75.5 million in cash at the end of 2011, and an anticipation of just $50 million in cash at the end of March 2012, expectations for American Superconductor are getting higher. The company will have to see significant revenue growth to stay afloat, a big risk considering where the company is coming from.

The company is expecting revenue of roughly $27 million and net loss to be reduced significantly in the fiscal fourth quarter. Revenue expectations are down slightly from December, but visibility doesn't appear to be terribly high right now.

Cash burn is the biggest concern for American Superconductor in 2012. Unless the company cranks up sales quickly I'm just not sure there is enough cash to avoid bankruptcy or a dilutive stock offering. I'll hang on to my out of the money call options for now, but there's going to be a lot of good news in 2012 for them to be profitable.

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