A123 3Q Loss Widens, Revenue Edges Up

WATERTOWN, Mass. (AP) — A123 Systems Inc., a developer of lithium-ion batteries for use in automobiles, reported a wider loss in its third quarter, its first since going public.

The loss, reported after the markets closed Tuesday, was driven by higher product costs and operating expenses, which more than offset a 3 percent rise in revenue.

A123 raised $391 million in net proceeds in its initial public offering in September. The company also won a $249 million grant from the U.S. Department of Energy.

"The high level of interest and design activity across our portfolio of customers and prospects, and in each of our target markets, is encouraging for A123's long-term growth," said A123 CEO David Vieau.

The company lost $22.9 million, or $1.78 per share, in the three months ended Sept. 30 compared with a loss of $18.9 million a year ago.

Revenue rose to $23.6 million from $22.9 million a year ago.

Deutsche Bank analyst Dan Galves said A123's most important achievements include deals that will drive revenue growth.