Plug Power is scheduled to release its next earnings report before opening bell tomorrow, and Wall Street is not very optimistic. The hydrogen fuel cell system maker delayed the release of its quarterly earnings and hasn’t exactly been on a sales tear, although its shares have been highly volatile for some time.
What to expect in Plug Power’s earnings report
Consensus estimates suggest Plug Power will post losses of 4 cents per share on $26.3 million in revenue for the fourth quarter. That represents a 227% year over year increase in revenue. The company greatly disappointed in its last earnings report in November, posting losses that were twice as bad as Wall Street expected and sales that missed by about 19%, reports John Divine of Investor Place.
Plug Power management has been steadily reducing their revenue guidance for this year. In January, they said sales should be higher than $100 million. Only three weeks before that, however, they said revenue should be around $130 million.
Plug Power delays SEC filing
One thing that has investors on edge is Plug Power’s decision to put off releasing its 10-K filing. The company cited “unforeseen delays in collecting, compiling and finalizing certain financial and other related data” as the reason for putting it off.
Historically speaking, it certainly isn’t a good thing Plug Power delayed it filing. Aside from the question it leaves with investors regarding its accounting practices, a study conducted by Rutgers and NYU found that companies which put off releasing their earnings report miss consensus estimates more than half (55%) the time.
Plug Power trades near 52-week low
Shares of Plug Power are currently hovering around their 52-week low, which may be a buying signal for some investors. However, the fuel cell system maker has yet to make any money, posting quarter after quarter of losses and spending years reinvesting what little revenue it has been making.
In a post on The Street, Richard Saintvilus warned investors to prepare for disappointment in tomorrow’s earnings report. He pointed out that in Plug Power’s third quarter earnings report, it said it had a backlog of 2,534 units worth $35.7 million. He also noted that the backlog number has been falling.
In the second quarter, Plug Power had a backlog of 2,659 units worth $36.6 million. In last year’s first quarter, the company reported a backlog of 3,063.
Will Plug Power ever make money?
In the third quarter, Plug Power reported adjusted losses of $7.5 million and research and development expenses of $1.6 million, which was almost double what it was the year before. The fuel cell system maker’s other expenses are surging as well, with sales, general, and administrative expenses climbing nearly 80% to land at $5 million in the third quarter.
Santvilus does note that Plug Power has $156 million in cash on its balance sheet and just $3 million in debt. However, with cash flow being -$40 million, the company will burn through all that cash in just a few short quarters.
And with the fuel cell industry as a whole not looking promising, it’s no wonder Wall Street seems to be so bearish on Plug Power.
Shares of Plug Power dipped as much as 5.24% to $2.71 per share during regular trading hours today.