Plug Power Cuts Loss Y/Y, Profit Booking Mars Initial Gains - Analyst Blog

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A leader in fuel cell technology Plug Power Inc.  ( PLUG ) reported a second-quarter 2014 loss of 4 cents per share on Aug 14, in line with the Zacks Consensus Estimate. However, reported loss was narrower than the loss of 5 cents incurred in the comparable year-ago quarter.

Plug Power, Inc - Earnings Surprise | FindTheBest


On a GAAP basis, the company reported earnings of 2 cents per share versus a loss of 14 cents per share in the year-ago quarter. The difference between the operating and GAAP results in the reported quarter was due to gains related to the change in fair value of previously issued common stock warrants of $9.6 million.

The narrower year-over-year loss, solid revenues and a strong backlog of GenDrive units had resulted in an upward revision in prices on Aug 14. The shares gained 4.3% to close at $6.11, reaching its highest point in nearly last three and a half months. This inevitably led to profit booking from the investors resulting in a correction of Plug Power's share prices which finally closed at $5.92 on Aug 15, down 3.1% from the prior day.

Total Revenue

Plug Power's second quarter revenues of $17.3 million surpassed the Zacks Consensus Estimate by 4.3% and soared 130.7% from $7.5 million in the prior year. The year-over-year improvement was due to a 125.4% rise in product revenues.

Plug Power's service revenue in the reported quarter improved by 185% year over year to $4.4 million, which also contributed to the solid top-line performance.

Highlights of the Release

Plug Power shipped 687 GenDrive units in the reported quarter, much higher than the 246 units shipped in the second quarter of 2013. Thanks to robust shipments of GenDrive units to customers like Wal-Mart Stores Inc. ( WMT ), The Procter & Gamble Company ( PG ) and Central Grocers, the company easily surpassed its shipment target of 650 GenDrive units provided during first quarter earnings release.

Plug Power exited the quarter with a backlog of 2,659 GenDrive units valued at $36.6 million.

The company reported research & development (R&D) expenses of nearly $1.4 million in second quarter 2014, up from $0.82 million in second quarter 2013. The growing investment in R&D will help the company to come up with more fuel efficient energy and technology solutions.

Financial Update

Plug Power exited the quarter with $168.6 million of cash and cash equivalents versus $5.02 million at 2013 end.

Net cash used in operating activities during the first half of 2014 was $19.9 million versus $10.9 million in the comparable year-ago period.

Guidance

2014 total revenues are expected to reach $75 million, with total bookings expected to touch $150 million.

Peer Release

Ballard Power Systems Inc. ( BLDP ) posted a loss of 3 cents per share in the second quarter of 2014, in line with the Zacks Consensus Estimate.

Our View

We believe that fuel cell technology holds immense potential particularly for providing green energy solutions for industrial usage. This technology actually boasts of zero emission levels making it all the more appealing.

After successfully using hydrogen fuel cell in the food and retail material handling sector, Plug Power is set to utilize its hydrogen fuel cells to power electric lift trucks at automotive manufacturing sites worldwide. In the reported quarter Plug Power was able to secure deals from the likes of Volkswagen, BMW, Mercedes-Benz and Honda.

The design improvement of its Class 2 product helped the company to lower material costs and boost gross margins.

However, higher operating expenses are eating into its profits, as the company continues to report in the red. Plug Power has a Zacks Rank #4 (Sell).


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



This article appears in: Investing , Business , Stocks

Referenced Stocks: PG , WMT , BLDP , PLUG

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