Pacific Ethanol Inc. reported higher third-quarter profits Wednesday in spite of a recent steep decline in the price of ethanol.
The Sacramento ethanol producer said it earned $3.7 million in the third quarter compared with a $5.3 million loss a year earlier. It earned 15 cents per share compared with a 40 cent loss a year ago.
Revenue improved to $275.6 million from $233.9 million last year.
The company has spent the past few years rebounding from a deep slump that forced it to shut down most of its production operations and place its plants in Chapter 11 bankruptcy reorganization. Stronger ethanol prices helped Pacific Ethanol recover.
In recent months, however, the price of ethanol has fallen again. During the third quarter, Pacific Ethanol said the average gallon of ethanol sold for $2.32 vs. $2.62 a year ago. But the volume of ethanol was up substantially, and the price of corn fell considerably. Corn is the main raw material in ethanol.
The falling price of ethanol has shaken investors’ faith in the company in recent weeks, cutting the stock price roughly in half. On Wednesday, Pacific Ethanol shares closed at $12.78, up 62 cents, on the Nasdaq market. But the price quickly fell sharply in after-hours trading following the release of the earnings, dropping $1.09 to $11.69.
Neil Koehler, the company’s president and chief executive, said in a news release that the quarterly results were boosted by “efficient operations and continued strong ethanol market fundamentals.” He and other company executives will hold a conference call with investment analysts Thursday.
Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.