Solazyme Slips as Brazil Production Pushed to Second Quarter

May 06, 2014 4:18 pm ET

(Updates with closing share price in second paragraph.)

May 6 (Bloomberg) -- Solazyme Inc., a California-based producer of renewable oils from algae, fell the most in three weeks after its first commercial production in Brazil was pushed into the current quarter. Revenue fell short of expectations and its first-quarter loss was bigger than expected.

Solazyme fell 4.5 percent to $10.37 at the close in New York, the most since April 10.

The company expects to begin commercial production at its Moema, Brazil, facility in the current quarter, according to a statement after the close of regular trading yesterday. South San Francisco-based Solazyme said in November that would happen in the first quarter, rather than last year, and reiterated the goal in February.

The company reported a loss of 44 cents a share, excluding stock-based compensation and other one-time expenses. That exceeded the 36-cent average of eight analysts surveyed by Bloomberg. Revenue was $12.4 million, missing expectations of $14.6 million.

The company is already delivering commercial volumes from its plant in Iowa, and the Brazil facility is nearly complete, according to the statement.

“While we haven’t yet announced our first commercial product out of Moema, much of that plant is operational,” Chief Executive Officer Jonathan Wolfson said in the statement. “We expect to manufacture commercial product at the Moema facility in the second quarter.”

Higher output this year may boost revenue and profit, Rob Stone, an analyst at Cowen & Co., said today in a note to investors. He rates Solazyme the equivalent of a buy with a 12- month price target of $18.

The company is “at an attractive entry point, ahead of an inflection as full-scale production begins to ramp,” he said.