FuelCell (FCEL) Q3 Earnings: What to Expect

S.Rabbits from FuelCell Energy (FCEL) have been under heavy pressure in the last few weeks and months and have plummeted by more than 25% and 65% in the respective thirty days and six months. And if you’ve bought and only held the stock since its 52-week high of $ 29.44 on February 9, you’ve seen a fall of up to 81%.

But can FuelCell, which makes green and blue hydrogen fuel cell systems for a variety of applications, revive its stock price? The market wants to know. That answer will become clearer when the hydrogen fuel cell maker releases its third quarter results for fiscal year 2021 after the closing bell on Tuesday. As the trillion-dollar infrastructure bill advances, FuelCell Energy must show that it can play a significant role in the anticipated spending spree.

Green hydrogen momentum hasn’t fully reached six months ago, but there are some signs that the market is starting to feel more optimistic about the industry’s outlook. Aside from a progressive global agreement on the clean energy transition, the House of Representatives will vote on President Joe Biden’s trillion-dollar infrastructure bill on September 27th. The package includes $ 8 billion for hydrogen projects.

FuelCell Energy, which continues to advance new technologies such as carbon capture and hydrogen generation, is one of several companies that will benefit from the spending. Wall Street analysts forecast year-over-year earnings growth due to higher revenues at FuelCell Energy. If that is achieved, it could be a powerful factor that could catalyze FuelCell’s near-term stock price. But with competitors like Plug Power (PLUG) and Ballard-Power (BLDP) are also fighting for position, the market wants to know on Tuesday how realistic the growth targets of FuelCell remain.

In the three months to July, Wall Street expects a loss of 5 cents per share on sales of $ 21.19 million. Compared to the same quarter last year, the loss was 8 cents per share on sales of 18.73 million US dollars. For the full year ending in January, a loss of 30 cents per share is expected, which is less than last year’s loss of 42 cents, while full year revenue of $ 72.34 million would increase 2.1% year over year .

Despite the projected quarterly loss of 5 cents, that represents a nearly 30% year-over-year increase, while revenue of $ 21.19 million would increase 13%. These are meaningful numbers when you consider how the green hydrogen industry is still emerging. FuelCell also sees a demand from the so-called cleaning of the gray hydrogen – an industrial gas room that has grown to 175 billion US dollars per year, which represents a tremendous opportunity not only from the point of view of plant construction, but also from the point of view of maintenance contracts.

Additionally, FuelCell’s generation portfolio, an important segment, continues to perform well, posting record sales in the last quarter. The generation segment that is expected to make a significant contribution to the company’s profitability goals. In particular, the company’s balance sheet is improving from quarter to quarter as both long-term and total debt have declined an average of 78% and 50%, respectively, over the past two quarters.

Although there is execution risk, the market recognizes the company’s significant market potential. Not to mention the growing demand from society and businesses to reduce the country’s carbon footprint. And this is where FuelCell has to sell its growth capabilities. And if that succeeds, the share price will react positively.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.

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