Wind turbine demand in China helped American Superconductor
Revenue increased 36% to $101.5 million on the back of its power systems division. Net income was up an impressive 130% to $10.0 million or $0.22 per share. Adjusted earnings per share, which excludes stock-based compensation, was $0.32, beating estimates of $0.28 per share.
The wind turbine business was busy as usual, but the surprise this quarter was a 3 million-meter order for the company's high-temperature superconductor wire. This is the largest order in history and may be showing a little momentum in American Superconductor's namesake product. I don't have huge hopes for this business, but if it takes off, it's an added bonus for shareholders.
Management also provided an early holiday present when it raised its forecast for the year. Revenue is now expected to be $430 million to $440 million with net income reaching $44.0 million to $46.5 million, or $0.95 to $1.00 per share.
A few weeks ago, I pointed out that this supercharged stock is riding the coattails of China's wind industry, and another quarter of impressive growth is just the start. American Superconductor's wind success is in contrast to GE
This looks a lot like a trend we see in solar. Chinese companies with access to capital and low labor costs as well as a government dead-set on building "green" energy have a big advantage over rivals, no matter how large.
Fellow Fool Anders Bylund pointed out a big increase in accounts receivable over last year, but the account was basically flat from last quarter. I'm more concerned about the ramping up of new wind customers and continuing the growth story since it's been just over a year since American Superconductor first posted a profit.
This solid quarter only solidifies my bullish thoughts on American Superconductor. Power products are continuing to perform well, and if superconductors can start to contribute positively as management suggests that's just icing on the cake.
Beam me up:
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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