Ballard Power Systems Inc. (USA) (NASDAQ:BLDP): A Stock To Watch

Boston, MA, 04/08/2014 (usastockreports) – Ballard Power Systems Inc. (USA) (NASDAQ:BLDP)’s stock is highly volatile in last two months. The stock is trading 52 weeks high price of $8.38 and last closed at $3.94. The uptrend was due to positive earnings in recent quarter reported by the Company after 21 years. Significant change in operating results may be due to shifting in its client base. But, it is too early to comment on the stock that will give stable returns in long-term.

Performance highlights

Ballard Power Systems Inc. (USA) (NASDAQ:BLDP) shifted its customer base to buses, forklifts and telecommunications towers to increase its profitability and move away from car clients such as Ford Motor Co. and Daimler AG. In 4Q2013, Ballard reported strong operating results due to the positive trend in profitable business telecom towers (+32%) and engineering services (+24%). Revenues were up by 5% year-over-year to $17.3 million. The increase in fuel cells products sales and the impact of engineering services and licensing improve gross margin to 34% and adjusted EBITDA to $0.2 million. The Company also improves its financial position with cash reserves of $30.3 million and no short-term obligations.

Growth segment

Telecom backup power and engineering services will drive revenue for Ballard in foreseeable years. The Company plans to strengthen its position telecom business in growing market such as China, Japan, Southeast Asia, India, and South Africa. In engineering services, Ballard continues to work with auto OEMs including Volkswagen and Hyundai, Toyota and Honda for fuel cells. In addition, Ballard supplies fuel cells product to Plug Power and expects an increase in orders including repeated orders of fuel cells from Walmart, Kroger, BMW and Mercedes-Benz.

Outlook

Ballard Power Systems Inc. (USA) (NASDAQ:BLDP) continues focus on high margin segment such as fuel cells product, engineering services and IP licensing to improve profitability. With the positive growth trends in these three businesses, Ballard expects increase in revenue by ~30% in 2014. 

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