FuelCell (FCEL) stock sinks 14% on earnings miss
FuelCell Energy’s (FCEL) stock price sank more than 14% Wednesday after the US renewable energy company reported fiscal fourth quarter and full year earnings that came in below Wall Street estimates.
Shares fell as much as 18% at one point to $4.83 per share before recovering some of the losses. Wednesday’s stock plunge occurred after the price rose more than 2% in premarket trading.
The Danbury, Connecticut-based company reported an adjusted net loss of $25m, or seven cents per share for the quarter ended 31 October. Analysts polled by Dow Jones had expected an adjusted loss of three cents per share. FuelCell Energy lost $19.7m, or eight cents per share, in the fourth quarter of 2020.
Revenue declined 18% year-over-year to $13.9m (£10.4m) from $17.0m.
Full year results
On a full-year basis, revenue dipped 2% to $69.6m from $70.9m from a year earlier. The adjusted net loss attributable to common stockholders was $104.3m, or 31 cents per share. Analysts polled by Dow Jones had expected it to come in at 27 per cents per share. Last year, the company lost $92.4m, or 42 cents per share.
“We finished fiscal-year 2021 with slightly lower revenue compared to fiscal-year 2020, but we continued to make important progress on our in-flight projects as well as new technology and applications under development, such as the successful demonstration of the effectiveness of our solid oxide fuel cell,” said president and CEO Jason Few in a news release. He added on the company's earning call that FuelCell Energy believes it can deliver a demonstration platform this year.
Adjusted earnings before interest, taxation, debt, and amortisation (EBITDA) fell 50.4% year-over-year to $35.7m from $17.7m.
Customers include utility companies, municipalities, universities, hospitals, government entities and military bases, and various industrial and commercial enterprises. The company says the US and South Korea are its leading markets.
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Earnings report follows lawsuit settlement
The earnings report came two days after FuelCell Energy announced that it settled a lawsuit with POSCO Energy, the largest private energy producer in South Korea. The agreement confirmed FuelCell’s exclusive right to sell its platform technology throughout Asia, while all previous licences granted to POSCO were amended.
“We are expecting orders for at least 20 replacement modules in calendar year 2022 to service existing installations in South Korea,” Few said on the company’s earnings call. “The total value of these orders represents roughly 86% of our 2022 revenue. We are optimistic that we will see meaningful revenues from product sales from Korea on a going forward basis.”
The chief executive also said FuelCell Energy is looking forward to creating opportunities in other Asian markets as well as select countries in Europe, the Middle East and Africa where it is prioritising product sales.
POSCO received the right to service its existing installed POSCO customer base but was given no other rights to FuelCell Energy technology in South Korea or broader Asian markets.
Earlier in the year, FuelCell Energy announced that it had advanced through commissioning at the US Navy submarine base in Groton, Connecticut and the company’s 7.4-megawatt power platform in Yaphank, New York. FuelCell Energy also extended its joint development agreement with ExxonMobil until 30 April 2022.
Founded in 1969, FuelCell manufactures fuel cell power plants of different sizes on a global basis. Power is derived from natural gas or biogas, carbon capture, and distributed hydrogen.