Clean Energy Takes Another Hit As Financials Cave For Amazon Fuel Cell Supplier
Plug Power (PLUG) stock sank more than 40% Friday after underperforming third-quarter earnings and revenue expectations late Thursday as the company reported it will need to raise money to fund its operations.
Latham, N.Y.-based clean energy play has increasingly focused its business on the green hydrogen supply chain, manufacturing fuel cells and electrolyzers, and offering storage and transportation solutions.
The company reported a Q3 loss of 47 cents per share with revenue totaling $198.7 million. Analysts had expected a loss of 30 cents per share and sales of $199.4 million. The company said in its earnings release that the “overall financial performance has been negatively impacted by unprecedented supply challenges in the hydrogen network in North America.”
Plug Power warned that given its current operating requirements it will need to “access additional capital in the market to fund its activities.” It said it was pursuing a number of debt capital and project financing solutions.
PLUG’s cash flow declined by $411 million in Q3. The company now has around $567 million of unrestricted cash/available for sale securities on its balance sheet.
Plug Power stock sank 42.8% to 3.40 in above average volume Friday during market action. Shares of PLUG on Thursday closed down 1.5% to 5.93.
Morgan Stanley analyst Andrew Percoco wrote Friday the firm believes PLUG will need to raise at least $500 million before the end of the year to supports its current cash-burn rate.
Plug Power said it was evaluating debt financing solutions to support growth. It also said it was working toward a conditional commitment from the Department of Energy (DOE) Loan Program Office to finance plants in its green hydrogen network. PLUG added it was exploring equity partners on hydrogen plants to lower its capital expenditures.
“If hydrogen supply does not improve, we believe it could continue to put pressure on PLUG’s ability to deliver new material handling and other fuel cell application sites,” Percoco wrote.
Plug Power Stock
The company went public in 2002. Plug Power’s legacy business is in supplying hydrogen fuel cells mainly for forklifts in large warehouses. Its fuel cells replace conventional batteries in equipment and vehicles powered by electricity. Plug Power clients include retail giants Amazon (AMZN), Walmart (WMT), Nike (NKE) and Home Depot (HD).
But the company has increasingly shifted its focus to the hydrogen supply chain, aiming to become the largest green hydrogen generator in the world. As a first step, it targets production of more than half of its hydrogen energy from entirely renewable sources by 2024. It also has targeted branching out from forklifts to heavy-duty vehicles to serve ports in the U.S. and Europe, as well as stationary fuel cells to power data centers and distribution hubs.
In January, 2021 PLUG hit a high of 75.49. It has fallen more than 90% since then and is down 52% so far in 2023.
Plug Power stock surged 7.5% on July 13 after the company announced a deal for 100 megawatts of electrolyzers for a green hydrogen project in Europe.
Electrolyzers use electricity to split water molecules, effectively “refining” hydrogen from water. Hydrogen produced from water, using electrolyzers powered by renewable sources, such as solar, wind or hydro, is labeled “green” hydrogen.
Plug Power said at the time electrolyzers deployed in that deal would generate approximately 43 tons of green hydrogen per day. The green hydrogen will replace “gray” hydrogen (produced from natural gas or methane) in the oil refining process, according to the company.
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