Justice Sirikah

A-Power Energy Generation Systems, Ltd. (NASDAQ: APWR) Winds up Q3 with a Tint of Red Ink

by Justice Sirikah December 7, 2009
apwr_logo.jpgA-Power Energy Generation Systems, Ltd. (NASDAQ: APWR) on Thursday disclosed a third quarter loss that was eclipsed by modest analysts’ expectations, for the most part, as a result of write-downs from convertible bonds. Not even the company’s renewed affirmation of the 2009 guidance alongside its separately announced multi-million dollar DG projects in Pakistan could help to forestall a 2.31 percent declination on the stock market by the close of Friday’s trading session.

  A financial statement issued by the provider of distributed power generation systems revealed a net loss of $623,000 ($0.02 per share) for the period between July and September. This indicates a negative flip-flop from a net income of $9.41 million ($0.28 per share) on record for the comparable quarter of last year. Figures for the just ended three months reflect a loss on change in fair value of warrants and on change in fair value of embedded derivative, the company reported. Average street forecast had been a quarterly profit of $0.31 per share.

  A-Power’s total third quarter revenues edged up 13.2 percent to $96.7 million owing to a year-on-year growth of the company’s DG projects over the period. In the same period of 2008, the revenues had arrived at $85.4 million, while for the recent quarter analysts were looking forward to slightly higher revenues of $113. Meanwhile, gross profit increased to $12.6 million from last year’s $10.5 million, with a gross margin of 13.1 percent over 12.4 percent of the corresponding period of a year ago, attributable to cost savings in labour.

  “Our DG business progressed well during the third quarter”, said A-Power’s chairman and CEO, Jinxiang Lu. “14 out of our total 17 projects were under construction according to their respective schedules. As the Chinese government continue to emphasize energy conservation and encourages green technology applications, our DG business remains strong and our track records continue to extend”.

  Looking forward, the clean energy firm maintained its previous full year net income and revenue guidance at $32 million and $320 million, in that order. In other news, A-Power announced two separate DG projects contracted by Pakistan Amraas International, valued at approximately $120 million. The transaction involves construction and operation of twin biomass power plants of 25MW each, plus a geothermal plant to be built for the Pakistan Parliament Building by A-Power’s subsidiary, Shenyang Power Group.

  At the time of writing, APWR shares had picked up 1.47 percent of previous loses, and they were trading at $15.89.

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