The Burnaby-based company, which has been sharpening its focus on its core fuel-cell stack business over the last year, is mulling possible divestitures or restructuring for its e-drive division at Dearborn, Mich.

An e-drive is a series of components used to convert electricity from a fuel cell into mechanical energy to propel a vehicle. CEO John Sheridan said while the Dearborn team has leading expertise in engineering, design and prototyping these fuel-cell e-drive systems, the business has limited revenue potential and high operating costs.

"To be clear, we have not made a decision yet. We are in evaluation mode," CEO John Sheridan said during a conference call with analysts.

"But it is important to note . . . that some options - if implemented - could result in a material non-cash writedown of goodwill."

Chief financial officer David Smith was unable to provide more specifics about the writedown but said the company is discussing a possible transaction with a small group of potential buyers.

Earlier in the day, the fuel-cell company said its third-quarter loss widened to US$17.9 million from US$8.9 million last year, when there was a big one-time gain.

The loss for the quarter ended Sept. 30 amounted to 16 cents a share, compared with seven cents per share for the same period in 2005. The firm reports in U.S. dollars.

The bigger loss resulted from a third-quarter 2005 gain of US$17.8 million from the sale of Ballard Power Systems AG, partly offset by a $7.4-million loss on disposal and writedown of long-lived assets related to electronic power converter assets.

Excluding unusual items, Ballard's normalized net loss was $17.7 million, or 16 cents per share, compared with a year-earlier net loss of $21.5 million or 18 cents per share. Analysts' consensus forecast was for earnings of 16 cents a share, according to Thomson Financial.

Revenue, meanwhile, slipped to $14.1 million from $16.1 million. But operating cash consumption was $10.6 million in the third-quarter, a 57 per cent improvement.

"We have no shortage of challenges, but I feel that Ballard has made a lot of progress over the past year and I think there is evidence to that effect in the third-quarter results," Sheridan said.

The company, he added, continues to make "solid progress" against its corporate objectives for 2006.

"Traction is now clearly evident in nearer-term fuel-cell market opportunities, as shown by our progress in the residential cogeneration and materials handling markets, with the achievement of our annual goals in both markets," he said.

CFO Smith said Ballard is on track to meeting its financial guidance for 2006. Full-year revenues are expected to be in the range of $55 million to $65 million, while operating cash consumption is expected to be in the lower end of the previously disclosed range of $50 million to $65 million.

Said Smith: "We expect to see higher revenues in the fourth quarter compared to the third quarter primarily due to higher engineering development revenues and higher product revenues." On the Toronto Stock Exchange, Ballard shares lost 15 cents to C$7.15.