Westborough, Massachusetts, Jan. 23 (Bloomberg) -- American Superconductor Corp. shares fell
29 percent after the developer of superconducting wires said electric companies are delaying
spending on equipment.
The shares of American Superconductor fell $9.63 to $23.19 in Nasdaq Stock Market trading.
U.S. electric utilities are putting off orders for equipment that improves reliability and power
flows in their grids, the company said in a statement. The utilities want to wait to see how new
regional organizations ordered by the Federal Energy Regulatory Commission will control
transmission lines, an analyst said.
``There's some uncertainty about what the final form of these organizations will be and what the
rate-making structure is going to be,'' Arnhold and S. Bleichroeder Inc. analyst Barbara
Silverman said. ``So, utilities are holding off on their spending right now.''
The Westborough, Massachusetts-based company said its fiscal third-quarter loss widened to
$4.1 million, or 20 cents a share, from $2.9 million, or 19 cents, in the year-ago quarter. That
matched the average estimate of six analysts surveyed by First Call/Thomson Financial.
Revenue rose 12 percent to $5.6 million from $5 million in the year-ago period, the company
said.
FERC has told utilities to form regional transmission organizations to take control of transmission
lines from utilities, which could use them to compete unfairly against new rivals as more states
move to end monopolies on power sales.
American Superconductor said the delayed orders caused revenue for its superconducting
magnetic energy-storage products to fall into the low end of the company's target for the quarter
ended Dec. 31. The company is considering new financing and leasing programs to allow
utilities to receive the products this summer without affecting their capital budgets.
Silverman said it's unclear when the utilities will learn the structure of the new regional
transmission organizations and whether those organizations will be for-profit or not-for-profit. She
has a ``buy'' rating on American Superconductor shares.
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