Briefing: AMSC's Fortunes
Earlier this month, Devens-based wind and power grid company AMSC reported quarterly revenue that was better than in the fourth quarter of last year, but down compared with the same period last year. The company is working to regain its footing more than two years after losing its largest customer, which is facing a federal indictment, accusing it of stealing trade secrets from AMSC.
What were the first-quarter numbers?
AMSC reported revenue of $23.1 million, down from $28.7 million in its previous first quarter, which ended June 30, 2012. In contrast, its first-quarter revenue for its 2010 fiscal year was $97.2 million, up more than 33 percent over the previous year. But compared to the previous quarter, revenue for the most recent quarter rose 13 percent, driven by higher sales from the company's wind segment. Yet, AMSC declared a $10.5 million net loss.
What has happened since 2010?
Aside from a name change — American Superconductor to AMSC — the company's annual revenue plunged from $315.9 million in its 2010 fiscal year to $76.5 million two years later. But it rebounded in fiscal 2013 (which ended March 31) to $87.4 million. AMSC has also cut its workforce. Most recently, in late 2012, the company cut a quarter of its workforce, leaving about 340 employees remaining worldwide, in response to “challenging conditions” in the wind power market.
Why is the indictment of its former customer important?
First, AMSC stands to recoup at least some of the more than $1 billion in deliveries and damages it said it suffered over the alleged contract violations and intellectual property theft by Sinovel Wind Power Group of China, its one-time largest customer. Second, on a broader scale, a conviction will send a message to the Chinese government that it must recognize the rights of foreign companies that want to do business.
What’s the outlook for AMSC?
As it continues to recover from its past struggles, the company expects annual revenue growth of at least 25 percent for the current fiscal year. “We have a solid presence in several established markets and continue to seek opportunities to enter emerging markets where we see significant opportunity,” President and CEO Daniel McGahn said.
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