Pacific Ethanol suspends ethanol plant in Imperial Valley, California; says still on track for 220 Mgy in ‘08

Pacific Ethanol said that it was suspending construction on its ethanol plant near Calipatria, in the Imperial Valley.

The company confirmed that it would still attain its 220 Mgy production target in 2008, and confirmed that its ethanol plants in Stockton and Magic Valley would remain on track for completion.

In a note to investors, Raymond James analyst Pavel Molchanov said “We are assuming that construction is resumed at the Imperial Valley facility, followed by a start-up by the end of 2Q09. Given this delay, we are lowering our EPS estimates for 2008 and 2009 from $0.46 to $0.41 and from $0.58 to $0.37, respectively.”

Molchanov added: “While our stance on the entire ethanol space remains cautious, and we have some concerns about Pacific Ethanol’s cost structure, we continue to believe that the company offers investors a unique way to gain exposure to the growth potential of the West Coast ethanol market. We maintain our Market Perform rating.”

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