Pacific Ethanol Surge: Fool by Numbers

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On Aug. 8, Pacific Ethanol (Nasdaq: PEIX) released second-quarter earnings for the period ended June 30.

• Revenues surged drastically, the result of an increase in volumes by 122% to 43.9 million gallons of ethanol.
• The company's acquisition of a 42% interest in Front Range Energy is in line with its strategic vision of buying local plants to cut the transportation costs of supplying ethanol.
• Management thinks recent regulations enacted in both California and Oregon will create an additional 1 billion gallons of demand for ethanol.
• Motley Fool CAPS participants seem skeptical about this industry. Pacific Ethanol, along with other players Aventine Renewable Energy Holdings (NYSE: AVR) and Green Plains Renewable Energy (Nasdaq: GPRE), all have a Motley Fool CAPS rating of one star (out of a possible five).

(Figures in millions, except per-share data.)

Income Statement Highlights

	Q2 2007	Q2 2006	Change
Sales	$113.8	$46.5	144.9%
Net Profit	$2.2	($0.2)	N/A
EPS	$0.03	($2.56)	N/A
Diluted Shares	40.3	33.2	21.2%

Get back to basics with the income statement.

Margin Checkup

	Q2 2007	Q2 2006	Change*
Gross Margin	9.8%	7.1%	2.7
Operating Margin	2.5%	(3.1%)	5.6

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q2 2007	Q2 2006	Change
Cash + ST Invest.	$50.4	$140.0	(64%)
Accounts Rec.	$19.2	$12.8	50.3%
Inventory	$19.8	$3.0	565.6%

Liabilities	Q2 2007	Q2 2006	Change
Accounts Payable	$11.8	$10.9	7.9%
Long-Term Debt	$104.2	$0.0	N/A

The balance sheet reflects the company's health.

Related Foolishness:

• Biofuels Buzz: Buyouts, Bovines, and Brits
• Ethanol's Production Problem
• Quick Take: Lyondell Goes Dutch

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.