KiOR Tops Earnings Estimates, Rises on Monday

KiOR

topped fourth quarter and 2012 earnings estimates and is riding high to open the week. The Pasadena, Texas-based firm lost $0.28 per share during the fourth quarter, falling short of the $0.15 per share loss in Q4 2011. However, it beat the Wall Street consensus of a loss of $0.32 per share. Fourth quarter revenue rounded out at $87,000 - the company's first revenue since inception. This fell drastically short of the $1.62 million analysts hoped for. For the year, the cellulosic fuel producer lost $0.92 per share, coming in a bit below the $0.87 loss per share in 2011. Yet, the company lost less than expected, as analysts anticipated a $0.97 per share loss in 2012.

KiOR announced its first shipment of cellulosic diesel Monday from its facility in Columbus, Mississippi. The facility uses pine wood chips to manufacture gasoline and diesel, unlike the traditional process of using oil. As such, the “gasoline and diesel” the company produces are considered alternative fuels, not fossil fuels. KiOR touts its products as the first hydrocarbon fuels to be produced in the US on a commercial scale from non-human feedstocks. This compares to other alternative fuels such as biodiesel and ethanol. Biodiesel is made from vegetable oil and ethanol is typically made from corn or sugar cane, naturally causing concerns over using food for fuel. President and CEO Fred Cannon stated, “With first production at Columbus, KiOR has technology with the potential to resurrect each and every shut down paper mill in the country and to replace imported oil on a cost effective basis while creating American jobs...The technology is simply scalable and we believe sufficient excess feedstock exists in the Southeast alone to build almost fifty KiOR commercial scale facilities."

On March 6, TechNavio released a report indicating its analysts believe the global biofuels market will grow at a compound annual growth rate (CAGR) of 7.7 percent between the period 2011-2015. TechNavio describes government funding and subsidies as key drivers of this growth. However, the tech research company cautions that the lack of food security could pose a challenge to this market.

KiOR has hovered in the $5 to $7 range since early November and continues to do so on Monday. After a steady rise to over $6, where the stock hovered on Wednesday and Thursday last week, KiOR dropped and closed at $5.81 on Friday. However, the stock has quickly climbed to the $6 mark again on Monday on word of the company's successful fourth quarter. KiOR is up over three percent on Monday.