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Pacific Ethanol Gains
Thursday May 10, 10:35 am ET
Pacific Ethanol Climbs As Better Sales Lead to 1st-Quarter Profit
NEW YORK (AP) -- Pacific Ethanol Inc. shares rose Thursday after the ethanol producer said it swung to a first-quarter profit on higher sales and prices.
The Sacramento, Calif.-based company earned $1.9 million, or 5 cents per share, for the quarter. It lost $612,000, or 2 cents per share, in the first three months of 2006. Revenue more than doubled to $99.2 million from $38.2 million.
Pacific Ethanol sold 37.5 million gallons of ethanol, almost twice as many as it did a year ago, and ethanol prices were up more than 20 percent.
Analysts expected net income of 5 cents per share on $90.7 million in revenue.
WR Hambrecht & Co. analyst John Roy said the profit shows the company can succeed in a difficult market, and upgraded shares to "Hold," or "Neutral," from "Sell." He now expects the company to turn a profit in its second quarter of 4 cents per share on $106 million in revenue, up from a forecast of $105 million in revenue and breakeven on a per-share basis.
"We continue to model a tough pricing environment for 2007 and 2008, but now believe Pacific Ethanol can turn a profit even in difficult quarters," he said.
Eight analysts reporting to Thomson Financial rate the stock at "Neutral" or the equivalent, with three at "Buy"-equivalent.
Shares gained $1.75, or 12.7 percent, to $15.58. The stock has traded between $12.50 and $44.50 over the past year.
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