AMSC Q1 Earnings Miss Estimates on Margin Pressure, Sales Beat

American Superconductor Corporation AMSC reported first-quarter fiscal 2026 non-GAAP earnings of 16 cents per share, which declined 44.8% year over year and missed the Zacks Consensus Estimate of 20 cents. Revenues rose 30% year over year to $94.1 million and beat the consensus mark by 8.82%.

The top-line growth reflected organic expansion and the Comtrafo acquisition. Total backlog exceeded $400 million, highlighting strong demand across utility, materials, renewable energy and traditional energy markets.

AMSC's Grid Business Drives Top-Line Growth

Grid revenues were $76.3 million, up 27% from $60.1 million a year earlier, and accounted for 81% of total revenues. The increase reflected the contribution from Comtrafo along with growth across the company's power solutions portfolio.

Wind revenues climbed 44.6% year over year to $17.8 million from $12.3 million. Management tied the increase to higher electrical control system shipments and said its relationship with Inox remained strong as the customer continued ramping up production in India.

American Superconductor's Margins Face Pressure

Gross margin was 26.3% in the quarter. The cost of goods sold included about $1.5 million of purchase-accounting and other non-cash adjustments tied to Comtrafo, reducing gross margin by roughly 160 basis points.

Profitability also absorbed the impact of added direct labor in Brazil to support expected growth and an unfavorable product mix. Research & development and selling, general & administrative expenses totaled $22.5 million, up from $18.5 million a year ago. Management does not expect a similar product mix in the second quarter.

AMSC’s Orders and Backlog Strengthen Visibility

Total orders exceeded $130 million, led by materials and utility-sector mining activity. A $25 million order from a North American utility for a large mine expansion marked the biggest individual mining-project order in AMSC's history.

Materials accounted for about one-third of total orders, while traditional energy represented roughly 30%. Renewables, utility and other industrial applications each contributed about 10%, and military orders were just under 5%. The 12-month backlog exceeded $300 million.

The mining contract combines STATCOM technology, capacitor banks, shunt reactors, a power transformer, switchgear and protection equipment in a turnkey package. Management said the broader solution can expand project revenues by about five times versus a single-product sale and expects delivery during fiscal 2027.

American Superconductor Expands Brazil Capacity

AMSC purchased a third factory in Brazil for about $7.4 million during the quarter, completing a planned step associated with the Comtrafo acquisition. The facility is intended to support higher transformer production as demand currently exceeds capacity.

Management does not expect further building-related capital spending in Brazil. Future investment is anticipated to focus mainly on tooling and capacity, with spending paced against demand as the company works to increase Comtrafo's output and pursue broader Latin American opportunities.

AMSC’s Cash Flow Strengthens the Balance Sheet

The company generated operating cash flow of $16 million in the first quarter, up from $4.13 million in the prior-year quarter. Management attributed the improvement to strong milestone collections on several projects and initial customer receipts tied to recent orders.

It ended the quarter with cash, cash equivalents and restricted cash of $153.11 million compared with $147.55 million as of March 31, 2026. Capital expenditures totaled $10.44 million, including the Brazil factory purchase and additional build-out spending.

American Superconductor Issues Q2 Guidance

For the second quarter of fiscal 2026, American Superconductor expects revenues to surpass $85 million. GAAP net income is projected to exceed $1 million, or 2 cents per share, while non-GAAP net income is expected to top $8 million, or 17 cents per share.

Management noted that some customer deliveries were accelerated into the first quarter, making second-quarter revenues more challenging. Average lead times remain about nine months, and management said current backlog improves near-term visibility over the next two to three quarters. It also expects gross margin improvement in the second half of fiscal 2026.

AMSC’s Zacks Rank & Stocks to Consider

American Superconductor currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are Lumentum LITE, Applied Materials AMAT and Analog Devices ADI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Lumentum have surged 127.4% year to date. The Zacks Consensus Estimate for LITE’s fiscal 2026 earnings is pegged at $8.19 per share, up by 5 cents over the past 30 days, indicating an increase of 297.6% year over year.

Shares of Applied Materials have jumped 105.2% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.17 per share, up by 3 cents over the past seven days, calling for a rise of 29.2% year over year.

Analog Devices shares have surged 39.1% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, suggesting an increase of 59.4% year over year.

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