Alternative-energy company Hoku Scientific Inc. yesterday reported a narrower fiscal third-quarter loss on deferred revenue from photovoltaic systems installations and lower costs.

Kapolei-based Hoku said sales for the period that ended Dec. 31 rose to $1.3 million versus $1.1 million for the year-ago quarter.

The company lost $538,000, or 3 cents a share, compared with a year-ago loss of $1.3 million, or 8 cents a share.

Revenue for the nine months ended Dec. 31, 2007, was $2.6 million versus $4.2 million for the year-ago period. Hoku lost $2.2 million, or 13 cents a share, during the first nine months of the fiscal year, versus a loss of 635,000, or 4 cents a share, for the same period in 2006.

Hoku said lower fuel cell business revenue was partially offset by revenue from photovoltaic systems installations during the third quarter.

Hoku also issued a fiscal fourth-quarter sales guidance below Wall Street predictions and said it expects to incur losses for the quarter and beyond.

Yesterday's announcement sent shares down 70 cents, or 7.6 percent, to $8.50 in aftermarket trading. They earlier fell 20 cents, or 2.1 percent, to $9.20 in the regular session.

Hoku said it expects its fourth-quarter revenue to total $600,000 to $1.2 million in the quarter ending March 31. Analysts polled by Thomson Financial expect $1.3 million in revenue.

Costs are expected to rise significantly as a result of increased efforts to: support a polysilicon manufacturing and photovoltaic systems installation service business; develop products; and expand its corporate infrastructure, Hoku said.

As a result, Hoku said it expects to continue to report losses for the foreseeable future, including the fourth quarter.

Analysts expect a fourth-quarter loss of 20 cents per share.

In separate news, Hoku Solar Inc., a subsidiary of Hoku Scientific, said the state Public Utilities Commission is considering a proposal to operate a solar-power system for Hawaiian Electric.

Hoku would own and operate the system to be completed later this year and charge Hawaiian Electric for the power generated at a fixed rate over 20 years.

The system to be installed on the roof of Hawaiian Electric's Ward Avenue facility would be one of the largest single-site solar systems on O'ahu. It would have a generation capacity of at least 167 kilowatts.

Hoku Solar also said it has signed an agreement with The James Campbell Co. to plan a Kapolei Sustainable Energy Park, which would be the largest photovoltaic facility on O'ahu.

The Kapolei Sustainable Energy Park would be capable of generating approximately 1.5 megawatts of photovoltaic power. Over the life of the system, it would produce enough electricity to power approximately 6,700 homes for one year.