Alt energy results mixed: solar shines, fuels flop

Reuters
, Tuesday August 12 2008

(Wraps earnings from LDK Solar, Pacific Ethanol, Rentech and Metabolix)
*LDK Solar profit beats estimates, stock up 19 percent
*Pacific Ethanol loss wider than expected, shares slide
*Rentech, Metabolix losses widen on development costs
By Nichola Groom
LOS ANGELES, Aug 11 (Reuters) - Alternative energy companies posted mixed results on Monday as LDK Solar Co Ltd's quarterly earnings tripled on soaring demand for solar power, while Pacific Ethanol Inc reported a wider-than-expected loss on surging corn prices.
LDK shares soared 19 percent in extended trade as its profit and revenue blew past estimates as a manufacturing capacity expansion allowed the company to meet surging demand in Spain, where key government subsidies will be rolled back later this year. The Chinese solar wafer maker also raised its 2008 sales and shipment forecasts.
Pacific Ethanol, meanwhile, said a 67 percent jump in corn prices and surge in the cost of natural gas more than offset a 74 percent rise in the Sacramento, California company's sales. Its shares slid 13.5 percent to close at $2.05 on Nasdaq.
LDK and other solar power companies have enjoyed rapid growth as rising fossil fuel prices and concerns about global warming have spurred demand for renewable energy sources.
Ethanol makers, however, have struggled this year as higher corn prices have squeezed margins for the fuel, offsetting the growing demand from U.S. government mandates that require gasoline marketers to increase their use of ethanol.
Also on Monday, alternative fuel and plastics companies Rentech Inc and Metabolix Inc recorded wider net losses due to higher costs for developing their products.
LDK's second-quarter net income rose to $149.5 million, or $1.29 per American Depositary Share, from $49.8 million, or 45 cents per ADS, a year ago.
Excluding the change in fair value of prepaid forward contracts, the company earned 82 cents a share, according to Reuters Estimates. Wall Street analysts had been expecting earnings of about 40 cents a share.
In recent months, investors have shunned solar stocks due to fears that an expected pullback in Spain's generous solar subsidies could hamper demand.
ThinkPanmure analyst Peter Peng said much of the second-quarter demand for LDK's solar wafers likely came from Spanish solar system installers who are scrambling to finish projects before a cap on subsidies goes into effect.
"There is a pull for the Spanish integrators to get projects in by September, but even beyond that most of these solar companies are seeing very, very strong demand for 2009," Peng said. "There is a possibility that Germany, Italy and potentially France and other smaller markets could offset the loss of market size in Spain."
LDK's second-quarter revenue was $441.7 million, well above the company's May forecast of $278 million to $288 million.
LDK shares rose to $40 in extended trade after closing up 9 cents at $33.58 on the New York Stock Exchange.
Pacific Ethanol had a net loss of $10.5 million, or 23 cents a share, compared with a profit of $1.1 million, or 3 cents a share, a year ago.
Net sales climbed to $198 million from $113.8 million.
Analysts had expected the company to lose 13 cents a share on sales of $206 million, according to Reuters Estimates.
Rentech, a Los Angeles-based maker of clean fuels, waxes and chemicals, reported a quarterly loss of $7.8 million, or 5 cents a share, compared with a loss of $6.9 million, or 4 cents a share, a year ago.
Revenue rose 20 percent to $60.4 million, helped by strong demand and higher prices for nitrogen fertilizer products, but research and development costs soared.
Rentech shares rose 8 cents, or 3.4 percent, to close at $2.43 on the American Stock Exchange.
Metabolix, which is developing and commercializing biodegradable plastics made from switchgrass and other crops, also reported a wider loss due to higher product development and operating costs. The company's product, Mirel, is a joint venture with Archer Daniels Midland Co.
The Cambridge, Massachusetts company reported a net loss of $8.9 million, or 39 cents a share, compared with a net loss of $7.7 million, or 35 cents a share, a year ago.
Total revenue was $401,000, mostly from government grants. Last year, the company recorded revenue of $187,000.
Metabolix shares rose 17 cents, or 1.4 percent, to close at $12.26 on Nasdaq. (Additional reporting by Matt Daily in New York and Abhishek Chanda in Bangalore, editing by Richard Chang)