LATHAM, N.Y. - Plug Power Inc. (NASDAQ:PLUG), a leader in hydrogen fuel cell solutions, reported a disappointing first quarter of 2024, with revenue and earnings falling short of Wall Street expectations. The company's stock plunged 10% on the news of weaker than expected sales, signaling a negative market response.
For the quarter ended March 31, 2024, Plug Power posted a loss of $0.46 per share, which was $0.13 below the analyst consensus of a $0.33 per share loss. Revenue was reported at $120.3 million, significantly trailing the consensus estimate of $161.51 million. The results represent a stark contrast to the company's performance in the same quarter last year, highlighting the challenges faced in the current period.
Management attributed the downturn to a combination of factors, including a strategic shift to reduce inventory and limit production, which impacted equipment margins due to unfavorable overhead absorption. Despite these headwinds, the company noted improvements in gross margins for Fuel Delivered, Service, and Power Purchase Agreements compared to previous quarters, as well as a reduction in operating expenses.
Plug Power CEO Andy Marsh commented on the quarter, stating, "We continue to make steady progress by following our established goals and business priorities. As we enhance our financial performance in the upcoming quarters, Plug is set to retain its leadership role in advancing the hydrogen economy, which is anticipated to experience swift expansion and widespread adoption globally in the future decades."
Despite the setback, Plug Power highlighted several operational milestones, including the production of its Georgia and Tennessee hydrogen plants at nameplate capacity and the advancement of a loan guarantee from the Department of Energy. The company also secured DOE grants totaling up to $163 million for projects aimed at reducing hydrogen costs in the U.S.
Looking ahead, Plug Power has adjusted its sales strategy, focusing on direct sales or customer-financed leases, which has led to rebounding sales in its material handling business. Notably, the company expanded its partnership with Uline and secured a significant deal with a leading U.S. automotive manufacturer.
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