Advanced Battery Tech (ABAT) So So Quarter

Advanced Battery Tech (ABAT) reported after the bell today results that weren’t all that impressive.  I thought there might be a chance of a blowout quarter based on the fact the CEO recently purchase $1 million of ABAT shares, but that certainly wasn’t the case.  The company reported an EPS of .07/share which was inline with low expectations.  It’s a 13% drop from the year ago quarter.  On the revenues side, the company didn’t quite meet expectations posting $10.7 million, just a slight increase over the year ago quarter.  I don’t think it’s going to be enough to keep the rally alive in the shorter term for ABAT but we’ll see.  I’d much rather get in on a position if it returns to the 200 day moving average and the mediocre results and lack of guidance may be that catalyst.

During the quarter large capacity battery cells made up 36% of sales, medium capacity battery cells made up 55% of revenues, while small capacity cells made up 9%.

Commenting on the results, Mr. Zhiguo Fu, Chairman and CEO of Advanced Battery Technologies, stated, “We are pleased with the progress that our Company has made despite the difficult economic environment. We were able to achieve suitable revenue growth for the quarter, although we will strive for greater growth in 2009 with increased production capacity and tighter cost controls. As such, we expect the expanded assembly line in Harbin to be operational late in the second quarter of 2009, which will add the production capacity enabling an additional $22 million in revenue generation for 2009. We remain optimistic about our continued growth in the remainder of the year and currently our backlog for the battery business is approximately $64.0 million as of early May.”

Clearly the recent run up in the stock wasn’t based on this quarter’s results but the future potential of the company.  The sizable backlog and the recent closing of the Wuxi Angell acquisition which gets its foot into the fast growing electric and hybrid bike market is what excites traders but like I said above I think the recent run is a bit overdone.

Looking ahead, the company won’t provide guidance for the full year because of the difficulty in assessing the impact of the Wuxi acquisition, new production capacity and new product delivery schedules. 

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