Plug Power (NASDAQ:PLUG) reported second quarter earnings yesterday and the company surprised the market by reporting record revenues. There was an increase of 125% in products revenue which stood at $12.6 million, while services revenue went up by around 185% to $4.4 million - total revenue stood at $17.3 million, up around 131% compared to the same period last year. This increase is mainly due to the increased GenDrive unit sales which reached 687 units, compared to 246 units during the same period last year.
The company also reported improvement in the gross margins, representing 17% increase mainly driven by the higher sales volume due to increased customer base and higher production volume. However, the increased R&D expenses, cost of revenue and selling, general and administrative expenses left the company with a quarterly operating loss of around $6.6 million, almost same as the same period last year, with per share earnings of $0.02 compared to loss of $0.14 per share. In our previous article about the company, we said that increasing demand for fuel cells will make Plug Power a good investment - this earnings announcement has justified our optimism.
Plug Power has experienced success in the food and retail material handling sector over the last few quarters and the company is anticipating strong future growth in the sector. The company also secured GenDrive and GenKey deals with leading automakers including Volkswagen, Mercedes-Benz and Honda. We reaffirm that Plug Power is a solid long-term investment, as the market for fuel cells will continue to grow at a rapid pace, in our opinion. We maintain that Plug Power will continue to move higher.
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