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Ballard Power Systems shares slip after missing Street's 3Q estimates due to China slowdown

CEO Randy MacEwen attributed the quarterly shortfall to Ballard’s sluggish performance in China
power lines
Ballard unveiled a new liquid-cooled fuel cell stack, the FCgen-LCS, in the quarter

Shares of Ballard Power Systems Inc (NASDAQ:BLDP) slipped in Thursday’s pre-market session after the fuel cell technology company posted a loss and missed the Street’s revenue and profit estimates for the third quarter due to a slowdown in its business in China.

For the three months ended on September 30, the company, which is based in Burnaby, British Columbia, reported a loss of $6 million, or $0.03 per share, on revenue of $21.6 million. The results fell short of Wall Street’s estimates of a loss of $0.02 per share on revenue of $31.3 million.

Investors were left unimpressed and pushed Ballard shares down 14.5% to $3.18 before Thursday’s opening bell.

In a statement, CEO Randy MacEwen attributed the quarterly shortfall to Ballard’s sluggish performance in China where it is looking to position itself as a top fuel cell technology provider in the country's burgeoning fuel cell electric vehicle market.

READ: China’s Weichai Power pours US$163mln in Canada’s Ballard Power for a majority stake in the company

“Financial results disappointed in Q3, primarily due to a slower-than-expected ramp-up in China, while the Company’s long-term value and growth potential improved in the quarter,” MacEwen said.

Last August, Ballard announced it had secured around US$163 mln from Weichai Power Company and established a joint venture in China. The equity investment represents a 19.9% interest in Ballard and makes the Chinese automotive and equipment manufacturer Ballard’s largest shareholder.

Ballard and Weichai established a joint venture to support China’s growing fuel cell electric vehicle market in which Ballard will initially have a 49% ownership stake.

“Our strategic collaboration with Weichai Power, which we anticipate closing by year-end, is expected to be a positive long-term catalyst for our business,” noted MacEwen.

In the quarter, Ballard unveiled a new liquid-cooled fuel cell stack, the FCgen-LCS, which will be a core component for use in buses, commercial trucks and trains.

Contact Ellen Kelleher at [email protected]



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