On May 9, 2022, Plug Power Inc. (PLUG) reported its financial results for the first quarter of 2022. Disappointing on both earnings and revenue miss, the stock plunged further deep in the after hours.
Investors were already worried about the results falling short of their expectations as the stock fell by over 14% before the earnings release. Thus, at the end of the regular trading, the stock was valued at $16.63 after registering a new low of $16.55. Following the worse-than-expected earnings, PLUG nosedived to a new 52-week low of $15.01 per share in the after hours. Hence, the stock subtracted a further 9.74% in the after-hours while 1.25 million shares exchanged hands. Consequently, PLUG declined 5.83% to $15.66 in pre-market on May 05, 2022.
PLUG’s Q1 Summary
For the first quarter of 2022, the hydrogen fuel cells turnkey solutions provider posted sales of $140.8 million. While the sales did mark a huge YOY increase of 96%, it still fell short of the expected $144.8 million for the quarter. The company deemed seasonality as the reason for the quarter’s sales. According to PLUG, the first half of a year usually represents only 30% of full-year revenue while the second half yields the remainder of 70%. Hence, the company expects better revenue in H2 2022.
Moreover, while analysts were expecting the company to post a quarterly loss of 16 cents a share, it came out with a loss of 27 cents per share. Comparatively, the year-ago quarter’s loss was just 12 cents per share.
The company pinned the wider loss on increased hydrogen molecule costs due to rising natural gas prices which have been affecting margins in the fuel business.
What’s Up Ahead?
The company expects the higher natural gas prices and hydrogen molecule costs to continue into the second quarter of 2022. To mitigate the impact of this, PLUG is working on reducing logistics costs and improving system efficiency. Furthermore, the company said it is on track to reduce service costs on a per-unit basis in the near term, continuing into 2023. With its green hydrogen plants expected to come online by 2023, PLUG expects to see a step-change in the fuel business margin profile by then.
Conclusion
The geopolitical crisis has sparked an uncontrollable wave of inflationary pressure as supply chain hurdles continue. Amid the rising natural gas prices, PLUG also took a hit and posted earnings that were nothing but disappointing. However, the company said it is working on mitigating the higher costs through various steps and has targets set for the upcoming 12 and 24 months.
