BUSINESS

ATS Automation posts Q1 profit as sales rise, solar division cuts loss

08/14/2012 07:32 EDT | Updated 10/14/2012 05:12 EDT
CAMBRIDGE, Ont. - ATS Automation Tooling Systems Inc. (TSX: ATA) had a $9.8-million profit in its latest quarter, as the Ontario-based manufacturing equipment maker reduced losses from its troubled solar equipment arm.

The company, based in Cambridge, Ont., said Tuesday its overall profit in the three months ended July 1 was 11 cents per share, including a loss of two cents per share from the solar division.

ATS, which employs a total of 2,400 people at 20 plants in several countries, has been working to sell or spin off the solar division and lists it as a discontinued operation.

In the comparable period last year, ATS had a loss of $5 million or six cents per share, including a 13-cent loss at discontinued operations.

ATS increased its overall revenue to $152.2 million in the first quarter of fiscal 2013 up from $126.9 million a year earlier.

The overall profit and revenue were below estimates compiled by Thomson Reuters, which called for $161.8 million of revenue and 13 cents per share of net income.

ATS said the Automation System Group's revenue were 20 per cent higher than a year earlier, due to an larger order backlog at the beginning of the period. However, that was partially offset by a longer time to perform certain programs.

The Automation group's saw a 15 per cent increase in revenue from consumer products and electronics, an 18 per cent increase from life sciences and a 69 per cent increase from transportation, mainly due to improvements in the global automotive market.

That was offset by a 45 per cent decline in revenue from the energy market, reflecting lower activity in the solar business.

The Automation group added $168 million in bookings during the quarter, seven per cent higher than a year ago, but the company noted the general economic environment remains uncertain — especially in Europe.

"This has the potential to result in tighter credit markets which could negatively impact demand, particularly for the company’s European operations, and may cause volatility in order bookings," ATS said in its analysis.

"Despite the uncertainty and volatility in the global economy, activity in the company’s front-end of the business is robust. The company has seen strong activity in certain customer markets such as transportation and life sciences, although many customers remain cautious in their approach to capital investment."

ATS added that customer activity in the solar energy market has slowed, as reduced incentives in several markets negatively affected demand for increased generation capacity and equipment.

The company said it's conducting a formal sale process to divest Ontario Solar division and has received a number of non-binding offers.

An attempt to sell Photowatt France has failed and that part of the solar business filed for bankruptcy in France in November, resulting in that part of the business being declared a discontinued operation.