Ballard Power Systems Inc. (BLDP) reported fourth-quarter 2014 normalized net loss of 9 cents per share, wider than the Zacks Consensus Estimate of a loss of 5 cents. The company’s loss stood at 2 cents per share in the prior-year quarter. Lower-than-estimated sales in the Telecom Backup Power market, an increase in the cost of goods sold, and termination of licensing contracts in China and product warranty provisions impacted the company’s bottom line results negatively.
Including the impairment losses associated with the trade receivables and non-core investment in Chrysalix Energy Limited Partnership, GAAP loss in the fourth quarter came in at 13 cents per share compared with a loss of 2 cents a year ago.
For 2014, Ballard Power’s normalized net loss of 17 cents per share was also wider than the Zacks Consensus Estimate of a loss of 14 cents. Reported loss narrowed by a penny year over year.
On a GAAP basis, the company reported loss of 22 cents per share in 2014 versus a loss of 20 cents per share a year ago.
Revenue
In the quarter under review, Ballard Power posted total revenue of $15.6 million, missing the Zacks Consensus Estimate by 2.5%. On a year-over-year basis, the top line decreased 10% from $17.3 million primarily due to lower year-over-year revenues from Telecom Backup Power (47%), Development Stage Markets (34%) and Engineering Services (2%) businesses. This was partially offset by higher contribution from the Material Handling (119%) operations.
Annual revenues of $68.7 million lagged the Zacks Consensus Estimate of $69 million by 0.4% but increased 12% year over year.
Quarterly Highlights
In the fourth quarter, Ballard Power’s cost of goods sold was $18.7 million, up 64% year over year.
The company reported a gross loss of around $3 million in the quarter compared with a gross profit of $5.89 million a year ago. Negative net warranty adjustments due to higher customer service expenses at the Telecom Backup Power market and absence of high margin revenues as a result of the Azure Agreements breach primarily hit gross margin.
Cash operating costs in the quarter came in at $7.8 million, up 26% year over year primarily due to higher research and product development, and general and administrative expenses.
Ballard Power’s finance expenses dropped to $0.2 million compared with $0.3 million a year ago.
Financial Update
As of Dec 31, 2014, Ballard Power’s cash and cash equivalents were $23.7 million versus $30.3 million as of Dec 31, 2013.
In 2014, cash used for operating activities stood at $20.7 million compared with $17.4 million a year ago.
2015 Outlook
Ballard Power expects growth rate for revenues to be similar in 2015 compared with the 2012-2014 level, taking into account ongoing plans for fuel-cell product sales, engineering services and intellectual property licensing and sale.
At the Peers
FuelCell Energy Inc. (FCEL) posted fourth-quarter fiscal 2014 adjusted loss of 2 cents per share, narrower than the Zacks Consensus Estimate of a loss of 3 cents.
Zacks Rank
Ballard Power currently has a Zacks Rank #2 (Buy). Other favorably-placed stocks in the same industry include Intricon Corporation (IIN) and ZAGG Inc (ZAGG), each carrying a Zacks Rank #1 (Strong Buy).
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