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A-Power Energy Slips To Loss In Q4, Adj. EPS Tops View; Shares Down - Update

Distributed power generation systems and wind turbines maker A-Power Energy Generation Systems, Ltd. (APWR) Wednesday reported a loss for the fourth quarter, compared to a profit last year, hurt by losses related to convertible bond and warrants. On an adjusted basis, earnings per share came in above Street view. Revenues recorded a significant growth for the quarter. Shares of the company are currently down over 11%.

Quarterly net loss was $23.89 million or $0.69 per share, compared to a profit of $10.02 or $0.30 per share. The major one-time items for the recent quarter was fair value changes of embedded derivative of $20.85 million, change in fair value of warrants of $9.26 million and make-whole amount paid on conversion of $9.89 million. Excluding special items, the Shenyang, China-based company posted a net income of $20.62 million or $0.61 per share.

On average, three analysts polled by Thomson Reuters expected the company to report earnings of $0.41 per share. Analysts' estimates typically exclude special items.

Total revenues grew 54.6% to $125.89 million from $81.42 million last year, primarily due to increased DG revenues and revenues from 10 wind turbine units sold in the quarter. Analysts were looking for revenues of $130.93 million for the quarter.

Gross margin was 21.3%, up from 17.8% a year ago, mainly attributable to sales of 2.7MW wind turbines which carry higher gross margin. Gross profit increased 84.9% to $26.9 million from $14.5 million last year.

For fiscal 2009, net loss was $16.69 million or $0.49 per share compared to net profit of $28.52 million or $0.94 per share in the prior year. Adjusted net income, which excluding the expenses and non-cash losses related to the convertible bond and warrants, improved to $36.08 million or $1.05 per share from $28.52 million or $0.94 per share last year. Net revenue increased 17.5% to $311.25 million from $264.87 million. Market consensus were for an earnings of $0.85 per share on a revenue of $316.29 million for the full year.

Looking ahead to fiscal 2010, the company expects net income to be around $45 million and net sales to be approximately $380 million. Currently, two analysts expects an earnings of $1.32 per share on revenue of $542.98 million for full year 2010.

APWR shares are currently trading at $10.71, down $1.33 or 11.03% on the NYSE.

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