Shares of Plug Power (NASDAQ:PLUG) are plunging lower after it was announced Senator Joe Manchin would not support funding for climate and energy programs. This comes after months of negotiations on the matter between Manchin and Senate Majority Leader Chuck Schumer. Democrats were hopeful the Senator would support even a sliver of the initiatives they proposed. Now, it appears he will outright reject them.
Instead, Manchin is in favor of an August reconciliation bill that includes provisions to lower the price of prescription drugs and extend Affordable Care Act subsidies by two years. He cited increased federal spending as a driver of higher inflation.
Democrats wanted to pass the package that included climate and energy funding before the midterm elections. Now, it appears those hopes are dashed, and PLUG stock is dropping in response.
Manchin’s Rejection Sends PLUG Stock Lower
Shares of PLUG stock have been battered in recent months and are now down 45% year-to-date. Meanwhile, the hydrogen energy company’s first-quarter earnings fell below Wall Street’s expectations. Revenue came in at $140.8 million, missing analyst expectations of $144.5 million.
On top of that, Plug reported an earnings per share (EPS) loss of 27 cents while analysts were expecting a loss of 16 cents. Meanwhile, cash burn intensified as the company reported an operating cash flow loss of $210 million. A year ago, that figure tallied in at negative $117 million.
Hydrogen energy is still in its early stages, and bringing new technologies to light is a costly and time-consuming process. On the bright side, CEO Andy Marsh believes Plug will deliver 40 times more hydrogen electrolysers this year than 2021. He commented:
“Last year, we delivered 5MW of electrolyser systems, and this year we’ll deliver 200MW.”
This comes after the company received a massive 1 gigawatt electrolyser order from H2 Energy Europe to power an offshore wind-powered project in Denmark. Recharge reports that the order is “the world’s biggest to date.” Installation is set to begin in 2024, while the first hydrogen should be produced in 2025.
Since inception, Plug has delivered more than 50,000 fuel-cell systems and has installed over 165 fueling stations. The company currently has plans to build a “green hydrogen highway” across the U.S. and Europe.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.