Lake View: Ballard Power Systems Inc. 'Making Progress'

Ballard Power Systems Inc.

recovered some of its losses Thursday after offering a disappointing outlook, but an analyst said the company is making good progress with a plan to expand its markets and cut costs. Ballard gained more than 1 percent Thursday, trading recently at $2.82 a share following a steep plunge Wednesday. The Burnaby, B.C, fuel cell maker recently missed quarterly expectations and cut its outlook for 2014 revenue growth to 20 percent from an earlier 30 percent. But the company posted a top-line gain of more than 20 percent and Lake View's Robert D. Brown applauded "substantial improvements" in recent quarters. Still, Brown said those improvements are baked into the shares, and given timing uncertainties regarding the company's plan to offer power back-up systems for telecommunications sector, he maintained a Hold rating on the shares. The company is seeking to offer its fuel cells as a replacement for batteries in fork lifts, and revenue in its materials handling segment grew 71 percent to $3.6 million in the recent period. Engineering services revenue of $8.6 million was higher than Brown expected because of automotive contracts. Ballard's recent acquisition of fuel cell patents from United Technologies Corp.

may help revenue growth in the segment. A recent contract with the New York City Fire Department to deploy fuel cells on rooftops may help boost revenue in its telecom backup sector, which posted quarterly revenue of $6.3 million, Brown said. Ballard's net loss narrowed to $2.4 million or $0.02 cents a share in the third quarter, from a year-earlier loss of $4.6 million or $0.05 cents a share, while revenue grew 21 percent to $20.6 million.