Ballard Power (BLDP) Misses Q4 EPS by 4c

Ballard Power (NASDAQ: BLDP) reported Q4 EPS of ($0.09), $0.04 worse than the analyst estimate of ($0.05). Revenue for the quarter came in at $3.1 million versus the consensus estimate of $17.1 million.

2015 Business Outlook

Technology SolutionsA Technology Solutions transaction with Volkswagen Group (Volkswagen AG and Audi AG) announced earlier this month and closed on February 23rd, 2015 significantly impacts the Company's liquidity and net income for 2015 and beyond. The transaction has an aggregate value of approximately $80 million and is comprised of two key elements –

• Transfer, by Ballard, of the automotive-related portion of fuel cell intellectual property assets previously acquired from United Technologies Corporation (UTC), in return for payments from Volkswagen Group totaling $50 million. Ballard received $40 million at the close of the transaction, 25% of which will be paid to UTC as a royalty payment pursuant to the agreement announced on April 24, 2014. The Company expects to receive the remaining $10 million by Q1 2016, which will be subject to a 9% royalty payment to UTC; and
• A 2-year extension, through March 2019, of the existing long-term engineering services agreement signed by Ballard and Volkswagen AG in 2013, with an incremental value estimated at C$30-50 million (approximately US$24-40 million). The contract has a further optional 2-year extension, to 2021.

The Company anticipates continued growth in Technology Solutions contract activities in 2015.

Power ProductsThe Company anticipates growth in 2015 sales of Telecom Backup Power and Material Handling products as well as Bus modules. Recent developments include –

• Plug Power's outlook for its Material Handling operations in 2015 is positive, with some new end-customer order commitments now received – including a large retailer and sporting apparel manufacturer – as well as repeat orders anticipated from a number of existing end-customers;
• January 28th, 2015 announcement that Ballard's partner, Van Hool N.V., signed a grant agreement with the EU Hydrogen Fuel Cell Joint Undertaking for deployment of 21 fuel cell buses in Europe. Ballard anticipates receipt of purchase orders from Van Hool for delivery of FCvelocityTM-HD7 power modules that will be shipped to Van Hool in 2015 and 2016 for use in these buses; and
• February 17th, 2015 announcement that Ballard expects to provide 10 FCvelocityTM-HD6 power modules to BAE Systems and ElDorado National for use in buses funded by the U.S. Federal Transit Administration. Ballard anticipates receiving orders for these modules once agreements with the transit agencies are finalized and expects to begin shipments in the second half of 2015.

For earnings history and earnings-related data on Ballard Power (BLDP) click here.

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