As expected, bioplastics extraordinaire Cereplast (CERP) reported another quarterly loss which matched analyst estimates. The company reported a loss of .12/share on revenues of $7.2 million. The quarter represented a big spike in quarterly revenues as the company expands rapidly in Europe. With plans for a new plant in Italy, the expansion should continue quickly as many municipalities move to ban petroleum based plastic bags.
“The first quarter 2011 results reflect the initial quarter of significant revenues for the company and demonstrate the momentum of our business as we continue to benefit from legislation banning the use of plastic bags and suggesting the use of bioplastic in the European Union and other emerging markets, as well as the higher cost of commodities,” said Frederic Scheer, Chairman and Chief Executive Officer of Cereplast. “This momentum sets the stage for strong future growth as illustrated by the increased customer activity in Europe and establishment of important distribution relationships that are expected to ramp in scope and size throughout the remainder of the year.”
Looking ahead, the company is raising its full year 2011 guidance a bit from $24 – $32 million to $28 – $34 million.
Technically, shares of CERP remain quite bullish, but remain in a basing pattern. In recent days, the stock has reclaimed support of the 50 day moving average and held there following earnings. This is an exciting company and a leader in the bioplastics industry. Absolutely a company to watch as it’s expected to post its first profit next year.