In late July you’ll recall that Xantrex Technology turfed its chief executive Ray Rosewell and appointed director John Wallace as interim CEO. Well, this evening the company announced that Wallace, formerly a Ford executive who oversaw the automaker’s hybrid/fuel cell/electric vehicle program, will stay on as permanent chief. “My most urgent priorities are profitable growth, controlling cost, improving customer service and product quality, and increasing efficiency, speed and nimbleness,” said Wallace in a statement.

It will be interesting to see how analysts react to this news. When Rosewell was squeezed out and Wallace stepped in, the response was generally favourable. But this was on the assumption that Wallace’s appointment was temporary. Is the company settling? Did it search long enough? Did it have problems attracting other candidates? Or is Wallace the right man?

Chairman Mossadiq Umedaly said in a statement announcing the company’s third-quarter earnings (released after the close of markets) that he is impressed with Wallace’s leadership so far. “Xantrex’s focus on operational imperatives has sharpened noticeably, and there is a tangible sense of momentum building throughout the enterprise.”

Momentum is one thing; profitability is another. The company reported yet another money-losing quarter. It lost $349,000 (U.S.) during the period, compared to a profit of $2.3 million a year earlier. Revenue was flat at $36.4 million.

That said, Umedaly’s comments were somewhat encouraging relative to past earnings reports. He said new solar markets in Europe and North America are now being tapped, led by the signing of a $10 million (U.S.) deal with Germany’s Solon AG, a leading solar PV module maker. The company is also seeing renewed traction in the wind market, announcing last night that a deal with Clipper Windpower Technology to supply $10 million worth of inverters over two years has been expanded to $12 million to be delivered in 2006.

Has Xantrex turned a corner? Given the stock plunged 14 per cent today (talk about blatant insider trading) it doesn’t appear investors think so. We’ll see what analysts say after the company holds a conference call tomorrow morning…

(UPDATE: Xantrex’s stock rebounded the following day by 11 per cent, so it seems there may have been an overreaction to the earnings and that there is sufficient confidence in Wallace as permanent CEO.)

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