Headwaters profit for quarter up 48%

South Jordan-based Headwaters Inc., an alternative fuels company, said fiscal second-quarter profit rose 48 percent on increased demand and higher prices in its coal-combustion business.

But the company's shares slid to their lowest in almost three years as sales in construction materials dropped.

Net income increased to $27.2 million, or 59 cents a share, in the quarter ending March 31, from $18.4 million, or 40 cents, a year earlier, Headwaters said Tuesday in a statement. The company was expected to earn 31 cents a share based on four analyst estimates compiled by Bloomberg. Revenue gained 1.6 percent to $274 million.

Headwaters shares fell 61 cents, or 2.8 percent, to close at $21.06 on the New York Stock Exchange. They dropped as low as $20.31 in earlier trading. The stock touched $19.50 on May 10, 2004.

Revenue from construction materials fell as a result of a slump in the housing industry, Headwaters said. The company expects higher sales and margins in the June and September quarters on higher seasonal demand.

Coal combustion sales rose 6 percent to $62.1 million. License-fees sales increased 58 percent.

Headwaters opened an ethanol plant in March that can produce 50 million gallons per year. The company expects the plant to add as much as $2 million in gross revenue this year.

Headwaters also said synthetic fuel is expected to contribute more to 2007 results than previously expected.