Deeper Loss for Raser, Misses Ests

Energy technology company Raser Technologies Inc. (RZ) announced its second-quarter 2010 operating loss of 72 cents per share, much higher than the Zacks Consensus Estimate operating loss of 11 cents per share. The results of the company were worse than the year-ago loss of 6 cents per share.

Total Revenue

Total revenue of the company at the end of the second quarter was $1.0 million versus $0.4 million in the year-ago quarter. Reported results were in line with the Zacks Consensus Estimate of $1.0 million.

Operational Update

During the second quarter 2010 Raser produced and sold 11,462 megawatts (MW) hours of electricity versus 4,876 MW hours in the year-ago quarter.

Cost of sales in the second quarter 2010 was $1.9 million versus $1.6 million in the year-ago quarter. The $0.3 million increase in cost was mainly due to increased sales from the Thermo No. 1 power plant during the second quarter of 2010.

General and administrative expenses were $2.1 million versus $2.8 million in the year-ago quarter, the reduction being primarily due to general staff reductions and accounting adjustments for forfeitures of non-cash compensation awards.

Power project development expenses in the second quarter 2010 decreased by $1.3 million to $2.1 million from $3.4 million in the year-ago quarter.

Interest expenses decreased 36.1% to $2.4 million in the reported quarter versus $3.8 million in the year-ago quarter. The lower interest expense in the reported quarter was due to a decline in long-term debt of the company.

Financial Update

Total cash and cash equivalents as of June 30, 2010, were $0.3 million versus $0.04 million as of December 31, 2009.

Total long-term debt of the company as of June 30, 2010, were $63.4 million versus $79.8 million as of December 31, 2009.

Our View

During the reported quarter Raser had undertaken a few commendable initiatives. The most significant one being the Memorandum of Understanding with Hyundai Heavy Industries to jointly develop renewable energy and electric vehicles.

We retain a short-term Zacks #4 Rank on the stock, which translates into a Sell rating. Taking into consideration Raser’s limited revenue potential, mounting losses and a valuation primarily based on future expectation like its alternate energy peers, we retain a Neutral rating (6+ months) on the stock.

Based in Provo, Utah, Raser Technologies is an energy technology company focusing on geothermal power development and technology licensing primarily in the United States.

Read the full analyst report on RZ