Pacific Ethanol Inc., the alternative fuel producer partly owned by Microsoft Corp. co-founder Bill Gates, reported a second-quarter loss of $8.33 million on higher corn costs.
The loss was 23 cents a share, compared with net income of $2.16 million, or 3 cents, a year earlier, Sacramento-based Pacific Ethanol said. Sales rose 74% to $198 million.
Higher prices for ethanol couldn't match the rise in corn costs during the quarter. Corn futures on the Chicago Board of Trade rose to a record $7.99 a bushel on June 27 amid speculation that Midwest flooding would damage crops. A bushel of corn produces about 2.7 gallons of ethanol.
"Ethanol prices did not rise enough to offset the rise in corn prices," said Ron Oster, an analyst at Broadpoint Capital Inc. in Albany, N.Y.
Shares of Pacific Ethanol fell 32 cents to $2.05 after the earnings news.