August 14, 2014 / 4:09 PM / 4 years ago

UPDATE 2-Plug Power revenue doubles as fuel cell demand soars

* Expects product gross margin to reach mid-20 pct in Q4

* Shares rise as much 10.6 pct (Adds details from the conference call, updates shares)

Aug 14 (Reuters) - Plug Power Inc’s revenue more than doubled, beating the average analyst estimate, helped by higher demand from customers including Wal-Mart Stores Inc , which uses its hydrogen fuel cells to power forklifts.

Plug Power, whose shares rose as much as 10.6 percent in early trading, became the first listed North American fuel-cell maker to turn a net profit as it recorded a gain on stock warrants.

The company, which deployed its first hydrogen fuel cell unit at a Wal-Mart site in the second quarter, reported a 17 percent gross margin in its product business.

Plug Power said it expects gross margin in the product business to reach the mid-20 percent in the fourth quarter.

The company said it is investing more to ensure its service business turns profitable “early next year.”

Plug Power also said it expects “a plethora of global opportunities” from the auto-manufacturing market as its customers begin to use hydrogen fuel cells at manufacturing sites worldwide.

Plug Power customers such as Daimler AG and BMW AG use fuel cells to power forklifts and other material handling devices at their warehouses.

The Latham, New York-based company shipped 687 fuel-cell units in the quarter ended June 30, higher than the 650 it had forecast earlier.

Fuel-cell makers, including Fuel Cell Energy Inc, Ballard Power Systems and Hydrogenics Corp , have become a hit with the Wall Street with increasing investor interest in cleaner technology.

Hydrogenics and Ballard Power also reported smaller quarterly losses, helped by rising demand for fuel cells used in forklifts, telecom networks and power backup systems.

Plug Power’s second-quarter revenue rose 131 percent to $17.32 million. Analysts on average had expected $16.7 million, according to Thomson Reuters I/B/E/S.

Net income was $3.8 million, or 2 cents per share, in the second quarter, compared with a net loss of $9.3 million, or 14 cents per share, a year earlier.

Excluding the gain, the company reported a loss of 4 cents per share, matching estimates.

Plug Power’s shares were trading up 2 percent at $5.97 in afternoon trading on the Nasdaq. (Reporting by Sneha Banerjee and Shubhankar Chakravorty in Bangalore; Editing by Don Sebastian)

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