Canadian fuel-cell product maker Ballard Power Systems (BLDP) recently reported financial results for the third quarter. It saw relatively strong sales for its telecom back-up power and material handling fuel cells. Also, its performance was partially driven by its engineering services that grew approximately 26% for the quarter. However, the company witnessed slowdown in its development stage market as it had fewer shipments for its bus module in China. It fell about 43% during the quarter.
The Vancouver-based company for the third-quarter reported revenue of $20.6 million, an increase of 21% as compared to $17.00 million in the same quarter last year. Also, its net loss for the quarter improved to $2.4 million or earnings of $0.02 per share from net loss of $10.00 million or earnings of $0.08 per share in the corresponding period a year earlier.
An important agreement
Looking forward, Ballard Power System should benefit from its new agreement with Plug Power. The Canadian fuel-cell product maker will deliver fuel cell stacks for Plug Power's GenDrive systems that are deployed in forklifts trucks. This creates a remarkable growth opportunity for Ballard Power as this agreement will enable the company to obtain top supply position for fuel cells in its GenDrive system.
This potential new agreement will not only enable the company to concentrate on the satisfying customer orders but also to successfully close significant additional opportunities in its sales pipeline. This will certainly drive growth for its bottom line and create value for shareholders in the long run. Plug Power’s GenDrive powers forklifts and other machinery are being utilized in various retail, medical, and automotive companies.
In addition, Ballard Power is experiencing strong momentum in its telecom Backup Power and the company expects this momentum to carry forward throughout the year. It expects to attain its original expectation for revenue growth in this market for the full year. Ballard Power has recently declared purchased order for ElectraGen ME for backup power systems. It is now planning to deploy this system in the Digicel network in Jamaica. It has now total of 25 systems operating in the region that should enhance its performance going forward.
More deployments ahead
Moreover, the company remains on track to deploy its Electra Gen ME system in Japan, Thailand, China and Philippines. It also expects to get additional orders from other customers in various regions. Also, one of the top United States telecom carriers has recently received confirmation from New York Fire Department for deployment of ElectraGen ME system for rooftop trial sites. This strong purchase orders should uplift its sales and enhance its growth potential in the future. Its Telecom Backup Power rose 60% to $6.3 million but fell short around 12% from its expected growth.
Ballard Power is also taking various strategic initiatives such as signing non-binding MOU with various automakers such as Skoda Electric, a Czech Republic bus OEM, and Rigas Satiksme, a Latvian transit bus operator that will certainly advance its bus deployment programs in Latvia. It has also confirmed that the launch of a European Service & Parts Center will soon be located at its Belgium bus manufacturing facility of Van Hool NV. Also, the company had successfully launched a 12-month field trial of a methanol fuel cell home generator system. This home generator system is also expected to facilitate nonstop power to approximately 34 off-grid homes in South Africa. These initiatives will certainly augment performance for its Development Stage Markets going forward.
Apart from these, its engineering services continue to capture market share for the company. The company has won many long-term contracts with various automotive and non-automotive players like Volkswagen AG. It has additionally won $2.1 million contracts from non-automotive contracts, including ongoing Bus and Backup Power activities for the China market. Further, Ballard is making good progress on the development of micro-fuel cell and working on various new aerospace contracts that should boost its sales in the current quarter and into 2015.
Conclusion
Ballard Power looks a great bet for long term investment. The company has signed new agreement with Plug Power and executing various smart moves that should drive its growth and deliver value for its shareholders going forward. The analysts have estimated CAGR of 38.90% this year and 45.50% for the next year that offers remarkable growth prospects.