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AMSC revises results over Sinovel row

UNITED STATES: Chinese turbine firm Sinovel's ongoing refusal to pay US component manufacturer American Superconductor (AMSC) for component shipments has forced the US firm to revise its results for the second and third quarters of its 2010/11 financial year.

Last month, AMSC announced it intended to restate revenue for the fiscal quarters ending 30 September 2010 and 31 December 2010, estimating that the former would be revised down from $101.5 million to about $98 million and the latter from $114.2 million to $43 million.

This came after Nasdaq warned AMSC in June for failing to submit its annual results after already having the deadline to do so extended by 15 days.

At the beginning of June, AMSC said it was still reviewing the impact of its dispute with its biggest customer Sinovel — after the latter had refused to accept and pay for contracted shipments of wind-turbine components.

Pavel Molchanov, an analyst for financial services firm Raymond James, said that the write-downs showed it was reasonable for AMSC to want to withhold its results until the full impact of the dispute with Sinovel was understood.

"It is clear that for at least two quarters AMSC recognised revenue from Sinovel that had yet to be paid in cash by Sinovel and they have had to subsequently write down those statements," said Molchnov.

"Until AMSC's management are comfortable that any stating of accounts is accurate, it is understandable that they won't want to publish any statements (on full-year results)."

Molchnov added that while the lack of results was continuing to harm the firm's share price, investors' greater concern was the uncertainty surrounding its long-term revenue while the dispute continued.

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