Has American Superconductor Turned the Corner?

For the company’s first fiscal quarter, which ended in June, AMSC managed to cut its adjusted EPS loss by two-thirds to -$0.20 and to post revenue of $28.7 million. Analysts had been expecting an EPS loss of -$0.23 on revenue of $27.91 million. Revenue in the company’s Wind segment was up nearly 4x and in the Grid segment, revenue was up nearly 3x. Costs were essentially flat and the company put up a gross profit of $11.8 million.

Unfortunately the company’s outlook for its second fiscal quarter calls only for revenue to exceed $20 million and the adjusted EPS loss to be less than -$0.33. The consensus estimate for revenue is $30 million and the EPS loss is pegged at -$0.21.

AMSC’s backlog of orders totaled $269 million on June 30th, less than the $291 million backlog on at the end of March, and only a little better than the $225 million backlog at the end of June 2011.

So AMSC appears to be working itself out of a serious hole, but is this earnings report really good enough to send the stock up nearly 22%? The only reason for such optimism has got to be that the company’s management appears to have gotten a good grip on the issues facing the company and to have put into place a plan to get AMSC back on track. And the plan appears to be working, if a little slower than some might hope.

Shares are trading at $4.31 with about an hour to go in today’s session, up 21.8% in a 52-week range of $3.21-$7.39. Shares traded at around $38 in October 2010 and around $25 before disaster struck in April of last year.

Paul Ausick