Plug Power (PLUG) Stock Soars on Strong Earnings Beat - Stocks in the News

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Plug Power Inc. ( PLUG ) rose about 7% to $6.23 in premarket trading and is currently up about 3.94% after positive reports and strong revenue numbers that beat analysts' expectations.  Total revenue for the second quarter was $17.3 million, comprised of $12.6 million of product revenue, $4.4 million of service revenue and $0.3 million of R&D contract revenue. 

Net income for the second quarter was $3.8 million, or $0.02 per share on a basic and diluted basis beating Zacks Consensus Estimate of a loss of $0.04 per share.   This report is indicating slow but steady growth since last year's second quarter of reported net losses of $9.3 million, or $0.14 per share loss on a basic and diluted basis.  Included in the net income for the second quarter was a change in fair value of previously issued common stock warrants of $9.6 million. 

The company shipped 687 units during the second quarter of 2014 compared to 246 units in the second quarter of 2013. Plug Power Inc. ( PLUG ) has customers including Walmart ( WMT ), Procter & Gamble ( PG ), and Central Grocers.  GenDrive, an alternative energy supply, is a substitute for lead-acid batteries for uses such as in forklifts for Walmart and was a key reason for the growth. 

Margins and Company Commentary

The company reported a gross margin of 17% on its GenDrive product for the second quarter.  Plug Power also successfully deployed another product, GenKey, at the Walmart distribution center in Pottsville, PA and as a result, Walmart added an additional site in Sterling, IL to the original six-site contract.

Plug Power said it expects, "a plethora of global opportunities" from the auto-manufacturing market such as Daimler AG ( DDAIF ) and BMW AG to use fuel cells to power forklifts and other material handling devices in their warehouses.

Competition

In the second quarter, rivals Hydrogenics ( HYGS ) and Ballard Power Systems Inc. (BLDP) both reported similar growth in revenue, but small quarterly losses.   Hydrogenics posted a second-quarter net loss of $125,000, or 1 cent/share though revenue rose 10% to $10.7 million.  Ballard ( BLDP ) revenue grew 27% to $18.5 million, but reported a net loss of income of ($4.5) million of ($0.03) per share.  

Investors should be on the lookout to see how these companies' costs compare such as Research and Development, SG&A, and invest on the company that handles their costs more efficiently.  

Bottom Line

We currently rank Plug Power Inc. as a Zacks Rank #4 (Sell), and we have PLUG with an industry rank in the bottom 15% of all industries. However, given the positive prospects from the company and the growth opportunities, investors should be on the lookout for a possible Rank move higher in the coming days, should analysts revise their estimates higher.

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PLUG POWER INC (PLUG): Free Stock Analysis Report

BALLARD PWR SYS (BLDP): Free Stock Analysis Report

HYDROGENICS CP (HYGS): Free Stock Analysis Report

WAL-MART STORES (WMT): Free Stock Analysis Report

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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 , Earnings

Referenced Stocks: BLDP , PLUG , HYGS , WMT

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