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A-Power Energy Generation Systems Ltd. (OTC:APWR) recently posted second-quarter 2010 results. The company’s GAAP net income jumped 86.3% to $11.6 million from $6.3 million in the year-ago period. Excluding special items, earnings per share came in at 27 cents per share, which surged past the Zacks Consensus Estimate 14 cents.

A-Power is the largest provider of distributed generation systems (DG) focused on renewable energy in China, with project size ranging from 25MW to 400MW. The company also operates one of the largest wind turbine manufacturing facilities in China. During January 2010, the company acquired Japan-based Evatech Co. Ltd, which is engaged in the design and manufacturing of industrial equipment for photovoltaic (PV) panels.

During the quarter, A-Power’s quarterly revenues grew 30.1% to $74.8 million from $57.5 million in the prior-year quarter. The growth was mainly driven by higher revenues from the core DG segment as well as international revenues, particularly in Vietnam, Pakistan and Thailand.

A-Power’s gross margin expanded 220 basis points (bps) year-over-year to 15.5%, primarily due to an increase in large-scale DG orders and higher-margin international sales. Selling, general and administrative expenses, as a percentage of revenues, jumped 650 bps to 11.7%, mainly due expenses related to the Evatech acquisition and higher business related costs. Accordingly, operating margin dipped 430 bps to 3.9%, while operating income slipped 38.5% to $2.9 million.

A-Power ended the quarter with cash and equivalents of $125.4 million, compared to $128.7 million in the year-ago quarter. During the first half of 2010, the company raised $78.5 million of cash from a private placement and $49.9 million from bank loans and utilized $74.0 million for operating activities.

Moving forward, A-Power expects total revenue of $500 million and net income of $60 million in 2010. The Zacks Consensus Estimate for the year presently stands at $1.07 per share, which remained constant over the past 2 months. For the next year the Zacks Consensus Estimate has remained unchanged at $1.29 per share over the past 2 months.

A-Power has a short-term Zacks #3 Rank (Hold) and a long-term Neutral recommendation.

Source: A-Power’s Q2 Easily Beats