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Company: Pacific Ethanol (PEIX)
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  Distrubing excerpts from the fourth quarter earnings report

"The Company anticipates reporting gross profit of approximately $1.7 million for the fourth quarter of 2007 as compared to gross profit of $11.7 million for the same period in 2006. The Company anticipates reporting that its gross profit margin was approximately 1.3% for the fourth quarter of 2007 as compared to a gross profit margin of 14.6% for the same period in 2006. The decline in the Company's gross profit and gross profit margins was primarily due to a lower average sales price of ethanol and significantly higher corn costs." Although Pacific Ethanol sold its ethanol for an average of only $1.97 per gallon, it did manage, at least, to out price both VeraSun ($1.87) and Aventine ($1.94). The price PEIX paid for its corn, however, is not mentioned. -"The Company anticipates reporting a net loss of approximately $14.7 million for the fourth quarter of 2007 as compared to a net loss of $3.1 million for the same period in 2006."

-"The Company anticipates reporting a diluted net loss per common share of approximately $0.39 for the fourth quarter of 2007 as compared to a net loss per common share of $0.11 for the same period in 2006." The average analyst estimate is $-0.13. Yikes!

Pacific Ethanol's official fourth quarter earnings will be released on March 31st. Stay away from PEIX and any other pure-play ethanol company until profit margins improve as ethanol's crush spread is still very weak.

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