Plug Power (PLUG) Shares Fall on Incurring Wider Q3 Loss - Analyst Blog

Plug Power Inc.'s (PLUG) shares plunged 16.5% yesterday to $4.24 after it reported a wider-than-expected third-quarter 2014 loss.

Plug Power reported third-quarter adjusted loss of 4 cents per share, wider than the Zacks Consensus Estimate of a loss of 3 cents.

Including a gain associated with the change in fair value of formerly issued common stock warrants, the company's net loss per share was 6 cents compared with 19 cents a year ago.

Total Revenue

In the quarter under review, Plug Power's total revenues of $19.9 million missed the Zacks Consensus Estimate of $24 million by 17.1%. The top line, however, increased significantly from $4.6 million in the prior-year quarter.

Strong rise in sales of products (up 396.8% year over year) and services (up 324.2%) primarily led to the surge in reported revenues. This was partially offset by lower research and development contract revenues (down 19.7%).

Highlights of the Release

Plug Power shipped 857 GenDrive units in the third quarter, up 24.7% sequentially and 452.9% year over year. During the quarter, the company provided GenDrive units to numerous customers, including Wal-Mart Stores Inc. (WMT), The Procter & Gamble Co. (PG), BMW and Mercedes-Benz.

The company's bookings from customers during the quarter stood at more than $25.6 million. Orders came primarily from customers like Mercedes-Benz, BMW, Wal-Mart and several others.

Plug Power's cost of revenue jumped 145.5% year over year to $21 million primarily due to higher cost of both product and service revenues, and research and development expenses. In addition, selling, general and administrative expenses also increased 79.8% year over year.

The company reported operating loss of $10.7 million in the third quarter, compared with $8 million a year ago.

Financial Update

As of Sep 30, 2014, Plug Power had cash and cash equivalents of $156.5 million compared with $5 million as of Dec 31, 2013.

Net cash used in operating activities in the first nine months of 2014 was $31 million versus $17.9 million in the year-ago period.

Guidance

Plug Power provided its guidance for fourth-quarter 2014 GenDrive shipment in the range of 900–1,000 units.

For 2014, the company provided revenue projection in the band of $70–$75 million versus previous the estimate of $75 million.

Our View

The sentiment was overall bearish in this space with two other fuel cell makers, FuelCell Energy Inc. (FCEL) and Ballard Power Systems Inc. (BLDP) losing a respective 6.9% and 8.6% yesterday. It seems that investors are not too pleased with these companies at the moment.

Plug Power currently has a Zacks Rank #3 (Hold).