Plug Power Inc Q4, FY16 Business Expectations

Updated on

Plug Power is expected to release its business update in January. Market observers said investors should not expect expect further negative surprises on the company’s financial results for the fourth quarter because the management already lowered its expectations during its third-quarter conference call.

The alternative energy technology provider is expected to release its fourth-quarter FY2015 financial results in February or March next year. Plug Power will probably release its preliminary results before the end of the quarter, which the company did during the previous quarter.

Plug Power Q4 guidance

During its third-quarter conference call, Plug Power said its revenue for the fourth quarter is expected to be around $35 million. The company estimate a 40% decline on bookings quarter-over-quarter.

Plug Power originally target to achieve annual bookings of $200 million for the FY2015. The company is expected to reach its target given the fact that its bookings were strong during the first three-quarters of the year.

The company’s product gross margin is expected to decline significantly in the fourth quarter. Take note that its gross margin during the third quarter dropped from 24% to 16% despite a more than 30% increase in revenue.

Plug Power CFO Paul Middleton explained that the company’s gross margin was negatively impacted by higher than average product development costs, comparatively higher concentration of Class-3 units, and higher amount of stationary power sales.

The company is optimistic that its product gross margin could increase as much as 50% on a quarter-on-quarter basis, and its major GenDrive product line could achieve a gross margin of more than 25%.

FY 2016 expectations

In January, Plug Power is expected to deliver its business update particularly its expectations on bookings, revenue, and product shipments for FY2016.

Wall Street analysts expect Plug Power to achieve $147 million in revenues for fiscal 2016, an increase of 50% from its revenues in 2015. Its annual bookings are expected to be around $300 million.

There is a possibility for the company’s management to provide a disappointing guidance for FY2016. Some data showed that its business with customers declined in the previous quarter except Wal-Mart Stores.

Building a big business

However, Plug Power recently added Colruyt Group in the list of its GenDrive fuel cell customers in Europe. Colruyt Group is the supermarket leader in Europe. According to the alternative energy technology provider, the European supermarket operator will use 200 GenDive units at its facility in Halle, Belgium.

Yesterday, Plug Power announced that its GenKey Hydrogen and Fuel Cell Solution were again included in Food Logistics 2015 FL100+ List.

The company was selected as one of the fast growing companies in North America last month. Its name was included in Deloitte’s 2015 Technology Fast 500. Its CEO Andy Marsh said, “We are building a big business at Plug Power. We’re making all the necessary moves to enable Plug Power to achieve $500 million in sales within the next three to five years.”

Leave a Comment