By Shares of Plug Power Inc. plunged by more than 12% during after-hours trading on Thursday following a wider loss and revenue miss for the fuel-cell company. Plug Power cited “unprecedented supply challenges” as the cause of their financial setbacks.
Wider Loss and Missed Revenue Expectations
In the third quarter, Plug Power reported a loss of $283.5 million, or 47 cents per share, compared to a loss of $170.8 million, or 30 cents per share, in the same quarter of the previous year. Despite a slight increase in revenue from $189 million to $199 million year-over-year, Plug Power fell short of analysts’ expectations. Analysts polled by FactSet had predicted a loss of 31 cents per share on sales of $220 million.
Impact of Hydrogen Supply Challenges
In a letter to investors, Plug Power executives acknowledged that the company’s financial performance for the year has been negatively impacted by “unprecedented supply challenges in the hydrogen network in North America.” Severe hydrogen shortages have not only affected Plug Power’s direct cost of services but also delayed fleet upgrades for its customers. Additionally, inflationary effects on labor, materials, and overhead have contributed to cost increases.
Plug Power expressed confidence that the hydrogen-supply challenge is temporary, with expectations for its Georgia and Tennessee facilities to operate at full capacity by year-end.
Capital Funding Needs
Looking ahead, Plug Power anticipates the need to raise capital to support its business operations. The company is exploring various options, including debt capital, loan programs through the Department of Energy, and a memorandum of understanding with Fortescue, a green-energy company. The agreement with Fortescue involves a potential equity stake for both companies in each other’s hydrogen plants.
Despite these challenges, shares of Plug Power have experienced a significant decline of 52% year-to-date, in contrast to the S&P 500 index, which has gained approximately 13% during the same period.
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