Hoku Scientific posts $1.7M loss
Hoku Scientific Inc. posted its second consecutive quarterly loss due to expenses involved in setting up its polysilicon and solar-module businesses and lower gross margins from its fuel-cell contracts.
The Kapolei-based alternative energy company, which missed analysts' earnings forecast by 8 cents, had a fiscal fourth-quarter net loss of $1.7 million, or 11 cents a share, compared with net income of $508,000, or 3 cents a share, a year ago. Revenue fell 15.2 percent to $1.1 million from $1.3 million.
But analyst Colin Rusch, who covers Hoku for New York-based Piper Jaffray & Co.
, said the results were in line with expectations, considering the company's large ramp-up expense for the $260 million polysilicon plant in Pocatello, Idaho. Hoku's selling, general and administrative expenses more than doubled to $2 million from $771,000 in the year-earlier quarter.
"That's where the miss is coming from in our model," Rusch said. "They recorded a lot more in that line than we expected."
Dustin Shindo, chairman, president and chief executive of Hoku, said the company has made significant progress in preparation for the polysilicon startup and that "we are confident in our ability to complete construction in the second half of calendar year 2008 and begin deliveries of polysilicon in the first half of calendar year 2009."
Hoku's fuel-cell technology business, which has been de-emphasized as Hoku forges ahead with polysilicon and solar modules, provided lower revenue in the quarter with $1.1 million compared with $1.3 million a year earlier.
"We're not even valuing (Hoku's) business with (fuel cells) at this point," said Rusch, noting that the $370 million polysilicon delivery contract that Hoku signed with Sanyo Electric Co. Ltd. earlier this year was a major coup for the young company.
"The upside on the polysilicon business is absolutely enormous," Rusch added. "They could go from $1 million a quarter in revenue to $30 million plus by 2009 when they start producing polysilicon."
For the year ended March 31, Hoku swung to a net loss of $2.4 million, or 14 cents a share, from a net gain of $1.3 million, or 9 cents a share, in fiscal 2006. Analysts were looking for a loss of 6 cents a share. Revenue fell 2.5 percent to $5.4 million from $5.5 million.
For its fiscal first quarter, Hoku is forecasting a loss on revenue of $1 million to $1.3 million. It also projects revenue of $7 million to $10 million for the fiscal year ending March 31, 2008.