Ocean Power Technologies (NASDAQ:OPTT) said fiscal fourth-quarter sales fell but managed to top analyst estimates thanks to lower costs and a narrower net loss.
The New Jersey-based renewable energy company uses off-shore buoys to capture wave energy to create electricity.
Ocean Power narrowed its net loss to $4.1 million, or 40 cents per share, in contrast to a year-ago net loss of $5.3 million, or 52 cents per share. The company said the decrease in net loss was due mainly to a drop in operating loss.
Revenue slipped to $1.4 million versus the $1.9 million. The drop is due to lower sales of the company’s PB150 buoy being prepared for deployment off Reedsport, Oregon.
The company said the decline was offset by an increase in sales from its WavePort project in Spain and from PB500 development work.
Analysts polled by Bloomberg expected sales of $1.2 million for the quarter ended April 30.
Shares, in mid-morning trade, fell 28 cents or 9.36 per cent declining to $2.71 apiece on the Nasdaq on Friday.
“As we begin fiscal 2013, Ocean Power Technologies is taking strides on a number of fronts we expect will enhance our growth in the quarters to come,” Ocean Power chief executive Charles F. Dunleavy said in a release.
The company’s contract backlog, which consists largely of orders to support product development, saw a 23 per cent drop to $6.8 million from $8.9 million.
Gross margin narrowed to 1.7 per cent from 25.5 per cent. Operating costs improved to negative $4.1 million down from negative $5.4 million.
Selling, general and administrative costs rose to $2.4 million from $2.3 million, resulting from $600,000 impairment charges related to some assets tied to a previous project.
Ocean Power also announced on Thursday that it struck a deal with Lockheed Martin to develop a 19 megawatt wave energy project in Australia. This marks one of the largest wave-energy projects announced so date, and leverages a $65.3 million grant from the Commonwealth of Australia.
Wave energy has the potential to produce about 2,000 terawatt hours of electricity a year, according to the World Energy Council. The project will be developed by Victorian Wave Partners, currently owned by Ocean Power.
Lockheed Martin will help with the design of Ocean Power's PowerBuoy technology, lead the production and system integration of the wave-energy converters and support program management.