A security analyst said Tuesday he was reviewing his earnings estimates for VeraSun Energy Inc. after the ethanol producer missed Wall Street expectations for first-quarter earnings.
Net income for the three months ended March 31 was $7.6 million, or 8 cents per share, compared with a loss in the year-earlier quarter of $312,000, or break-even per share. Analysts polled by Thomson Financial expected, on average, earnings per share of 16 cents.
Calyon Securities (USA) analyst George Kotzias said the high cost of corn and natural gas were the main reason for the shortfall.
The miss "highlights the challenging environment the ethanol industry continues to face as commodity prices remain volatile. We remain cautious on the entire sector as we expect sustained higher corn and natural gas prices with little relief in sight.
"Wavering government support, continued fears of near-term overcapacity, and a long timeframe until commercialization of cellulosic ethanol are likely to weigh on stock prices for the foreseeable future," said Kotzias, who has a "Neutral" rating on the shares and an $8 price target.
Shares rose 9 cents to $6.49 in premarket trading after closing Monday at $6.40.
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