Raymond James Keeps Clean Energy Fuels (CLNE) at 'Underperform'; Q4 Results Worse than Expected

February 27, 2015 2:37 PM EST
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Price: $9.00 -1.21%

Rating Summary:
    7 Buy, 7 Hold, 5 Sell

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    Up: 13 | Down: 13 | New: 72
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Clean Energy Fuels (NASDAQ: CLNE) is markedly higher Friday after reporting Q4 EPS of $0.11 with revenue of $132 million. The Street consensus was looking for a loss of $0.17 per share on sales of $111 million.

Raymond James analyst Pavel Molchanov maintains his Underperform rating on CLNE amid the beat. The analyst notes that CLNE's adjusted loss actually came in at $0.01 per share for the quarter, while the firm was looking for EPS of $0.05.

Molchanov explains, The company’s non-GAAP EPS figure of $0.11 added back various items, but notably, did not remove 4Q’s one-time $12 million gain from the sale of a biomethane plant. Thus, what might look like a “headline beat” is actually the opposite when adjusted for this asset sale gain. That said, it is fair to say that the top line was solid. Product revenue came in at $117.5 million (including VETC revenue of $28 million – the catchup provision for all of 2014), 2% above our model. Service revenue of $14.6 million was 8% above our model. Product gross margin of 35.8% naturally contained the VETC benefit, though it was 300 bp below our model.

While adaptation of LNG in the trucking segment has been slower than expected, Molchanov notes two company specific reasons for the negativity: 1) choppy financial metrics and 2) a strained balance sheet and chronic cash burn.

For an analyst ratings summary and ratings history on Clean Energy Fuels click here. For more ratings news on Clean Energy Fuels click here.

Clean Energy Fuels closed at $5.04 yesterday.

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Raymond James, Pavel Molchanov