(Updates with closing share price in seventh paragraph.)
Nov. 29 (Bloomberg) -- American Superconductor Corp. has cut about half its workers as the wind-turbine component maker works to recover from the loss of its largest customer.
In the latest round of cuts, AMSC is firing more than 100 people, bringing annual savings since March to $50 million, Kerry Farrell, spokeswoman for the Devens, Massachusetts-based company, said today in an interview.
AMSC has “over 400 employees,” according to a statement today. The company had 848 workers in March and Farrell said there are less than 500 now, without giving the exact number.
The company has been working to return to profitability since a dispute with China’s largest turbine-maker, Sinovel Wind Group Co., led to a 79 percent plunge in sales in its second fiscal quarter of 2012, ended Sept. 30. Sinovel, which stopped accepting or paying for contracted shipments March 31, had accounted for about 70 percent of AMSC’s sales.
“They need to match the number of employees to their expected revenue and margins,” Craig Irwin, an analyst at Wedbush Securities Inc. in New York, said in an interview. “If they continue burning cash at $55 million a quarter, it’s not going to be too many quarters before they’re out of cash.”
Irwin predicts that AMSC will return to profitability in 2012, with earnings of 29 cents a share, excluding restructuring costs, stock compensation and amortization.
Shares of the company fell 4 percent to $3.84 in New York. The stock had dropped 86 percent this year before today.
AMSC is suing Beijing-based Sinovel in Chinese courts, claiming the company broke contracts and stole intellectual property. A former AMSC employee pleaded guilty to charges including economic espionage in an Austrian court in September after being accused of passing software and source code to Sinovel.
Sinovel has denied that it stole intellectual property from AMSC and said it stopped accepting AMSC shipments because they didn’t meet its standards.
AMSC will incur severance-related costs of less than $3 million in the current quarter, the company said today in the statement. The company expects to meet targets for quarterly revenue of more than $15 million in the current quarter and a net loss, excluding certain items, of less than $24 million, set earlier this month when the company announced its second-quarter results.
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