Revenues for the first quarter ended June 2011 were $9.1 million, compared with $97.2 million for the first quarter of fiscal year 2010.
The company said the decline was due primarily to a lack of revenue from Sinovel, which AMSC is suing for breach of contract and infringement of intellectual property rights.
The row stems from Sinovel’s refusal to accept a component shipment from AMSC in April. In response to AMSC’s litigation, Sinovel has said it had suspended paying AMSC and receiving its components because they did not conform either contractually or with China's grid-access requirements.
However, despite the huge drop in first quarter revenue, AMSC’s shares actually rose by their highest margin in two years in response to the company’s results announcement, as it confirmed $100 million in new orders.
AMSC signed contracts with wind-turbine manufacturers in China, India and Korea. Within its grid segment, the company received orders for its grid-interconnection and high-voltage stability solutions in the US and Europe, and made a key high temperature superconductor wire shipment to South Korea.
Shares rose by 14% to $5.04 on Friday following this sales news and confirmation that the company’s cash position was better than many investors had feared.
Net of the advance payment of approximately $20.6 million for the company's proposed acquisition of The Switch Engineering, the company's balance of cash, cash equivalents, marketable securities and restricted cash on 30 June 2011 was $166.2 million. This compares with $245.5 million on 31 March 2011 and $120.7 million on 30 June 2010.
Friday’s results also included final annual results for 2010 following downward revisions as a result of the Sinovel dispute.
Revenues for the firm in 2010 revenues were $286.6 million, compared with $316 million for 2009. The company reported a net loss of $186.3 million, including $158.5 million in aggregate one-time asset write downs, impairments and accrued charges associated with the company's accounting judgement that its relationship with Sinovel "will not continue". This compares with a net profit of $16.2 million, for 2009.
"Our financial results for fiscal 2010 and the first quarter of fiscal 2011 are a reflection of our past," said AMSC President and CEO Daniel McGahn.
"Our efforts to build a better AMSC are now well underway. We have reduced our cost structure by more than $30 million annually and realigned our business into market-facing Wind and Grid segments.
"We also have won nearly $100 million in new contracts since the start of our fiscal year, which we believe will help expand our customer base, diversify our revenue streams and return the company to growth."