A123 Systems Earnings: Loss Widens, Revenues Fall Hard

A123 Systems, Inc. ‘s (NASDAQ:AONE) loss widened in the first quarter, as the company’s results were dragged down by higher costs. A123 Systems designs, develops, manufactures, and sells advanced rechargeable lithium-ion batteries and battery systems for hybrid electric vehicles, or HEVs, plug-in hybrid electric vehicles, or PHEVs, and electric vehicles, or EVs.

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A123 Systems Earnings Cheat Sheet for the First Quarter

Results: Loss widened to $125 million (87 cents per diluted share) from $53.6 million (loss of 51 cents per share) in the same quarter a year earlier.

Revenue: Fell 39.8% to $10.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: A123 Systems, Inc. fell short of the mean analyst estimate of a loss of 39 cents per share. It fell short of the average revenue estimate of $18.4 million.

Quoting Management: “Our first quarter results were consistent with our revised expectations as reported last week. Revenue for the first quarter was impacted by our campaign to replace prismatic products in the field that may be defective and the temporary shutdown of our facility in Livonia, Mich,” stated David Vieau, CEO of A123 Systems. “Since announcing the field campaign, we believe we have identified and corrected the root cause of the defective cells. We are gradually restarting production in a controlled manner consistent with our commitment to improve our manufacturing processes and quality, and have started shipping replacement products to impacted customers. Our customers have been generally supportive during this process, and we continue to work with them during this challenging period.”

Key Stats:

The company has now missed analyst estimates for the last four quarters. It fell short by one cent in the fourth quarter of the last fiscal year, by 14 cents in the third quarter of the last fiscal year, and by 3 cents in the second quarter of the last fiscal year.

Last quarter’s year-over-year revenue decrease ends a three-quater streak of revenue increases. Revenue rose 68.1% in the fourth quarter of the last fiscal year, more than twofold in the third quarter of the last fiscal year and 60.8% in the second quarter of the last fiscal year.

Looking Forward: Analysts seem more negative about the company’s results for the next quarter than ninety days ago. The average estimate for the second quarter has moved from a loss of 34 cents a share to a loss of 42 cents over the last ninety days. The average estimate for the fiscal year has reached a loss of $1.46 per share, down from a loss of $1.32 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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