Lithium-ion battery maker A123Systems reported its first earnings this week since going public in September, showing a widening loss for the third quarter ($22.9 million, compared with $18.9 million a year ago), but also a revenue increase of 3 percent to $23.6 million, up from $22.9 million for the same period last year. What’s next for the company? This morning A123Systems is touting efforts to increase focus on the transportation market and battery cell development.
The company has formed two teams — the Automotive Solutions and Cell Products groups — and hired execs from Lear and Oshkosh subsidiary Geesink Norba to head them up. The divisions will operate alongside an existing group that has been focused on electric grid and consumer markets, according to A123’s release.
You won’t find any mention of it in the announcement today, but according to the company’s web site, these teams have actually been around since August, prior to the IPO. So hot on the heels of its first earnings report as a public company, A123 seems eager to show at least two encouraging signs for long-term growth, despite this quarter’s loss.
First, A123 wants to show it has what it takes to expand its business in hybrid, plug-in hybrid and electric vehicle applications, as well as heavy-duty vehicles (the Automotive Solutions Group’s mission). And second, it’s emphasizing a very general plan to stay ahead of the competition by improving existing tech, responding to customers’ changing requirements and pursuing new applications (the task of the Cell Products Group).
As one of only 10 venture-backed companies to go public this year, and the first cleantech startup to do an IPO after the recent market deep freeze, a strong performance by the company could help spawn a better IPO market moving into 2010. However it hasn’t seemed to open the floodgates as some like investor Steve Westly have predicted. Investors still seem confident in the company’s share price — while the lithium ion battery maker debut around $20, it’s currently trading around $17.
At this early stage, however, as VentureBeat points out, “Keeping shareholder spirits high is critical for A123,” since its investors are betting on A123 as a key player in a still-nascent business. So what the company is illustrating for us so far is the long slog many cleantech startups face to turn even a successful IPO ($380 million, in A123’s case) and $249 million vote of confidence from the feds into a strong market presence.