Syntroleum shares rise on Q1 profit
Syntroleum Corp.’s (Nasdaq: SYNM) stock continued to climb in after-hours trading Friday when the Tulsa, Okla.-based firm announced it had swung to a first quarter profit.
Shares closed up $0.18, or 6%, to $3.15 in the regular session and by 5:04 p.m. ET had risen by another $0.15, or 4.8%, to $3.30. The stock has traded between $2.45 (on Nov. 28) and $7.75 (on May 11, 2006) in the past year.
For the three months ended March 31, Syntroleum posted net income of $14.8 million, or $0.26 per share, on revenue of on $13.8 million, versus a net loss of $12.9 million, or $0.23 per share, on revenue of $428,000 in the year-ago period.
One analyst polled by Thomson First Call had estimated that the company would report a net loss of $0.11 per share.
Syntroleum converts natural gas to synthetic liquid fuels.
The firm's cash balance at quarter’s end was $33.2 million compared with a cash balance of $33.5 million on Dec. 31, 2006. It posted a loss of $54.6 million on revenue of $3.8 million for 2006.
Syntroleum CEO Jack Holmes said the company was able to significantly reduce its long-term debt by successfully negotiating with Marathon Oil Corp. (NYSE: MRO) in the first quarter. As part a new license agreement with Marathon that was reached in January, Marathon terminated and discharged all of its rights under two promissory notes, in the amount of $21.3 million plus accumulated interest in the amount of $6.3 million.
The agreement allowed Marathon Oil Co., a subsidiary of Marathon Oil Corp., the non-exclusive right to use Syntroleum's Fischer-Tropsch process to produce synthetic crude.
Syntroleum also agreed to pay Marathon two payments of $3 million each in December of 2008 and December of 2009.
Also, during the first quarter, Syntroleum teamed up with China Petroleum & Chemical Corp., known as Sinopec, to jointly develop natural gas-to-liquids and coal-to-liquids technologies in China.
