(Updates with closing share price in second paragraph.)
March 6 (Bloomberg) -- Gevo Inc., a U.S. biofuel producer that idled a manufacturing plant in September, rose the most in three weeks after cost-cutting narrowed its fourth-quarter loss, beating estimates.
Gevo advanced 5.4 percent to $1.96 at the close in New York, the most since Feb. 8.
The company had a net loss of $13.2 million, or 34 cents a share, compared with a loss of $14.2 million, or 54 cents, a year earlier, Englewood, Colorado-based Gevo said in a statement released after the market closed yesterday. That was less than the anticipated 48-cent per-share loss, the average of four analysts’ estimates compiled by Bloomberg.
The company cut research expenses in the quarter and executives waived their 2012 bonus payments.
“The beat was mainly driven by” a 36 percent decline in operating expenses from the prior quarter, to $12.2 million, Pavel Molchanov, an analyst at Raymond James & Associates Inc. in Houston, wrote in a note to investors today. He rates Gevo the equivalent of a buy with a 12-month price target of $3.
The company said its isobutanol plant in Luverne, Minnesota, will resume operations this year. Gevo halted production of the renewable fuel in September to adjust the manufacturing process after yields were lower than expected.
The company said then the plant would switch to ethanol, and later determined that doing so wasn’t cost-effective. The plant is now idle, according to the statement.
A patent-infringement case involving Butamax Advanced Biofuels LLC is expected to begin April 1, according to Molchanov, and Gevo is in “a substantively advantaged position.” Butamax, a joint venture of DuPont Co. and BP Plc, sued Gevo in 2011 alleging misuse of technology for genetically engineered microorganisms used to produce biofuels.
A trial court and an appeals court both concluded that Butamax “does not hold a valid patent,” Molchanov said.
--Editors: Will Wade, Alex Devine