Plug Power (PLUG) to Post Q3 Earnings: What's in the Offing?
Plug Power's (PLUG) Q3 earnings results are likely to reflect the wide popularity of fuel-cell engines. However, high costs and operating expenses, supply-chain issues and forex woes might also hurt.
Plug Power Inc. PLUG is expected to release third-quarter 2021 results early next week.
The company delivered better-than-expected results once in the last four quarters and missed estimates thrice. Earnings surprise for the trailing four quarters was a negative 63.24%, on average. In the last reported quarter, the company’s loss per share of 18 cents was wider than the Zacks Consensus Estimate of a loss of 7 cents.
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In the past three months, shares of the company have surged 55.4% compared with the industry’s growth of 0.2%.
Factors at Play
Plug Power is anticipated to have benefited from the growing adoption of fuel-cell solutions and a growing popularity of hydrogen stations in the third quarter of 2021. Strength in the company’s core material handling, on-road and stationary power markets and strong bookings in the electrolyzer business are likely to have supported its top-line performance in the quarter.
Given the company’s solid product portfolio including GenDrive, GenFuel, GenSure and ProGen product lines and its efforts to expand and enhance its global presence through multiple strategic partnerships are expected to have been beneficial in the quarter. For instance, its partnership with Groupe Renault is enabling it to tap the hydrogen-powered light commercial vehicle market in Europe and the same with SK Group is allowing it to fortify its footprint in the markets of Asia. Also, it entered into a collaboration with BAE Systems for developing hydrogen-powered electric buses.
The company is also expected to have gained from its investments in product development along with its focus on improving its operational productivity during the to-be-reported quarter.
However, rising cost of sales and operating expenses have been a concern for Plug Power over time. In the first six months of 2021, its total cost of sales increased 110.1% year over year while total operating expenses jumped 101.7%. Also, the impacts of the coronavirus pandemic on the company’s supply chain as well as increase in labor and raw material costs are likely to have adversely impacted its margin and profitability in the to-be-reported quarter.
Forex headwinds and geopolitical issues stemming from international operations might have also hurt the company’s quarterly performance.
The Zacks Consensus Estimate for third-quarter loss per share is pegged at 9 cents, indicating an improvement from a loss of 11 cents recorded in the year-ago-quarter. The consensus estimate for revenues of $152 million suggests a 42.1% increase from the prior-year reported figure.
Plug Power, Inc. Price and EPS Surprise
Our proven Zacks model does not predict a beat for Plug Power this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here as you will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Plug Power has an Earnings ESP of -4.27% as the Most Accurate Estimate is pegged at a loss of 10 cents, wider than the Zacks Consensus Estimate of a loss of 9 cents.
Zacks Rank: Plug Power carries a Zacks Rank #3, currently.
Here are some companies you may want to consider from the Zacks Industrial Products sector as our model shows that these have the right combination of elements to deliver an earnings beat this time around:
Deere & Company DE has an Earnings ESP of +5.55% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Middleby Corporation MIDD has an Earnings ESP of +0.29% and a Zacks Rank of 3, currently.
Tetra Tech, Inc. TTEK has an Earnings ESP of +0.50% and a Zacks Rank of 2 at present.
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