Pacific Ethanol weathers tough Q1 ethanol market, sees summer pick-up

May 8, 2016 |

In California, Pacific Ethanol reported revenue of $342.4mn, below consensus estimates of $360.4mn. The company posted adjusted EPS of ($0.32) well behind the Wall Street consensus forecast of ($0.13). Management highlighted strong year over year EBITDA results of $1.6mn.

Cowen & Company’s Jeffrey Osborne wrote:  “Pacific Ethanol continues to face strong headwinds from the macro energy market. The company reported revenue and adjusted EPS below both our and consensus estimates. However, management highlighted its strong adjusted EBITDA results as well as its $17mn term debt reduction. The company continues to leverage its diversified production base and markets to better manage commodity and price risk. While 1Q16 results are tough for the Ethanol complex, we expect an improvement as we head into the summer driving season and ethanol blend rates increase. In addition, export activity has picked up in recent weeks, helping to alleviate some of the excess inventory in the market.”

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