FutureFuel Earnings: An Early Look

Earnings season is winding down, with most companies already having reported their quarterly results. But there are still some companies left to report, and FutureFuel (FF 1.52%) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

FutureFuel is one of many companies seeking to develop economically viable biofuels. That's been a tough problem to crack, but with a variety of different products encompassing both biofuel and specialty chemicals, FutureFuel hopes to come up with successful commercial applications to serve multiple industries. Let's take an early look at what's been happening with FutureFuel over the past quarter and what we're likely to see in its quarterly report on Monday.

Stats on FutureFuel

Source: Yahoo! Finance.

Will FutureFuel fuel investor profits this quarter?
Analysts have reduced their calls on FutureFuel over the past few months, reducing their earnings-per-share figure for the just-ended quarter by a penny and cutting 2013 estimates by $0.08. The stock, though, has done well, rising more than 17% since mid-December.

Over the years, alternative fuels have drawn a lot of excitement from investors seeking to take advantage of high oil and gasoline prices. Yet the traditional ethanol industry has suffered from rising crop prices, with revenue growth having come to an abrupt halt at Green Plains Renewable Energy (GPRE 5.25%) during 2012 after seeing its sales jump nearly 20-fold from 2008 to 2011. Even well-established player Archer Daniels Midland (ADM 1.36%) has seen ethanol capacity utilization plunge as the drought last year has greatly reduced corn inventories.

Yet FutureFuel has the benefit of having two main businesses. In addition to its biodiesel business, it also produces custom chemicals for use in personal care products and detergents as well as herbicides. Solazyme (TVIA) has tried to follow that same playbook by marketing its algae-based oils not just for energy but also personal care. FutureFuel, however, has consistently turned a profit for its efforts, with partnerships with consumer-products giant Procter & Gamble helping it keep its earnings up. Moreover, FutureFuel even pays a dividend, yielding more than 3%.

In its quarterly report, watch for FutureFuel to discuss its future plans to try to broaden its revenue base. For now, though, the company is doing a good job of making the most of its opportunity.

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