American Superconductor Corp. (NASDAQ: AMSC) caught a tailwind this morning after the maker of wind-energy components announced first quarter earnings that beat analysts’ expectations thanks in large part to China’s greening.
“China, in particular the China wind industry, is the primary driver for our growth today,” said American Superconductor CEO, Greg Yurek in a conference call with analysts.
For the first quarter, the company posted net income of $1.8 million, or 4 cents a share, compared with a net loss of $6.1 million, or 14 cents a share, a year ago. Excluding items, it earned 12 cents a share. Revenue grew 83 percent to $73 million.
AMSC’s largest customer, wind-energy generator maker, Sinovel Wind, accounted for approximately70 percent of AMSC total revenue, and recently increased the its total contract value with American Superconductor to $470 million.
The original Sinovel contract, signed in January and valued at $450 million, had called for AMSC to ship core electrical components for Sinovel’s 1.5 megawatt wind turbines through the end of December 2011. Now, AMSC will increase its core electrical component shipments to Sinovel in 2009 and 2010 and now agrees to complete all shipments by the end of April 2011.
In 2008, China grew the installed base of wind turbines to about 12 GW and early this year declared that they intended to add another 10 GW or more in 2009, Yurek noted. Research by China Wind Energy Association projected that China would grow its wind power installed base between 108 GW and 132 GW by 2020.
“With Sinovel continuing to gain market share, many of our other wind turbine manufacturers set to commence production over the next 12 months, and power grid demand on the rise worldwide, AMSC’s outlook is stronger than ever,” said Yurek, adding that Sinovel is looking to double its production in 2009 and further growth is expected in 2010 and beyond.