The ethanol debacle continues, as the latest disaster for the artifical commodity is Pacific Ethanol (nasdaq:PEIX) had an even worse quarter than expected, as losses surged to $54.9 million in the third quarter, up significantly from the $4.8 million in the same quarter last year.
As with other ethanol companies, blame has been placed on the increased price of corn, and in Pacific's case, an impairment charge of $26.6 million for quitting construction on a plant in California.
This is in spite of revenue growing 56 percent to $184 million, a solid increase from $118.1 million a year ago.
Losses equaled 98 cents a share, a much larger number than the 16 cents a share analysts were looking for. Revenue was also far below the $218.6 million projected by analysts.
It's amazing to see this endless black hole continue to be fed by federal subsidies, when it ethanol as an alternative fuel simply needs to be laid aside. It isn't working and it won't work in the future.
We need to get out of denial and admit ethanol as a commodity and alternative fuel is a losing proposition.
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