WALTHAM, Mass. (AP) - Battery maker A123 Systems Inc. said Tuesday that its first-quarter more than doubled, pulled down by a steep drop in sales and hefty costs related to its ongoing replacement of potentially defective batteries and the shutdown of the plant that made them.
The results were considerably worse than Wall Street expected, but the company also announced that it had found and fixed the battery problem in question and was restarting production. Its shares rose 13 percent in midday trading.
The Waltham, Mass.-based developer and manufacturer of lithium ion batteries and systems said it posted a loss of $125 million, or 87 cents per share, for the three months ended March 31 compared with a loss of $53.6 million, or 51 cents per share, in the same quarter last year.
Revenue tumbled 40 percent to $10.9 million from $18.1 million, as product sales dropped 53 percent to $7.3 million, while revenue from services increased 36 percent to $3.6 million.
Analysts, on average, expected a loss of 39 cents per share on $18.4 million in revenue, according to a FactSet poll.
A123 said the recent quarter's results were hurt by costs stemming from its efforts to replace products in the field that may be defective and the temporary shutdown of the Michigan facility that made them.
A123 said in March that it expected to spend about $55 million, representing as much as one quarter of the 2012 revenue the company expected at the time, over the next several quarters to replace the potentially defective battery modules and packs.
When it announced the replacement plan in March, A123 said it expected its full year revenue to total between $230 million and $300 million, but the company cut that guidance last week to a range of $145 million to $175 million and backed that more recent prediction on Tuesday.
Analysts polled by FactSet expect $229.6 million in revenue for the year.
A123 said Tuesday that it has since identified and fixed the root cause of the problems and is gradually restarting production at the Livonia, Mich., plant. Its shares rose 12 cents, or 13 percent, to $1.03 in midday trading.
The company, which went public in 2009, has never posted a quarterly profit. Its shares have steadily fallen over the past 52 weeks, trading between 82 cents and $6.20 and losing about 84 percent of their year-ago value.