Pacific Ethanol looking for better second half - Analyst Blog

Comment

Shutterstock photo

Pacific Ethanol looking for better second half:

Pacific Ethanol ( PEIX ) reported its second quarter revenue on August 14, 2012. Due to a decline in ethanol prices as compared to last year, revenue was below year ago levels despite a significant increase in total gallons sold. Internal production was flat and third party sourced ethanol increased by 27%. We had expected an increase in gallons and flat pricing so results were below our expectations.




As a result of the minimal (or negative) spread between corn and ethanol prices the company is reducing the production of ethanol and, depending on market conditions and availability, will increase the third party sales. The conversion of the ethanol plants to separate the corn oil proceeds as expected and the first plant will be selling corn oil in the first quarter of 2013 and all the operating plants will have been converted by year-end 2013.


Pacific Ethanol expects the second half of 2012 to be better than the first half. We think that ethanol prices will increase as a shortage develops in the fall.


Corn supply in the west, the major supply area for the company, has not been as severely affected by the drought as has the mid west. However the price of corn is still at record levels.


Please visit scr.zacks.com to access a free copy of the PEIX research report.
 


 
PAC ETHANOL INC (PEIX): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks


More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research
Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com