FuelCell Q1 Loss Narrower Than Expected; Revenues Lag
Leading designer, manufacturer and operator of fuel cell power plants, FuelCell Energy Inc. (FCEL - Snapshot Report) reported first-quarter fiscal 2015 adjusted loss of 2 cents per share, narrower than the Zacks Consensus Estimate of a loss of 3 cents and the prior-year loss of 4 cents per share.
Fuelcell Energy Inc. - Earnings Surprise | FindTheCompany
Revenue
In the reported quarter, FuelCell Energy’s total revenues were $41.7 million, lagging the Zacks Consensus Estimate of $48 million by 13.1%. Total revenues also decreased 6.2% from $44.4 million a year ago.
Lower product sales, advanced technologies contract revenues and service and license revenues primarily led to the decline in quarterly revenues.
Highlights of the Release
In the quarter under review, FuelCell Energy’s total cost of revenues was $37.7 million, down 10.8% from $42.2 million in the prior-year quarter.
The company reported quarterly gross profit of $4.0 million compared with $2.2 million a year ago, a surge of 82.5%.
Total operating expenses in the quarter were $9.1 million, down 6.4% from the year-ago figure, primarily due to lower research and development expenses.
FuelCell Energy’s interest expenses plummeted 51.2% year over year to $0.7 million from $1.4 million a year ago.
Total backlog as of Jan 31, 2015, increased 3.1% to $337.0 million from $326.9 million in the prior period.
Financial Update
As of Jan 31, 2015, cash and cash equivalents were $84.7 million compared with $83.7 million as of Oct 31, 2014.
Long-term debt and other liabilities as of Jan 31, 2015 were $13.3 million compared with $13.4 million as of Oct 31, 2014.
Peer Release
Ballard Power Systems Inc. (BLDP -Snapshot Report) reported fourth-quarter 2014 normalized net loss of 9 cents per share, wider than the Zacks Consensus Estimate of a loss of 5 cents.
Hydrogenics Corporation (HYGS - Snapshot Report) reported fourth-quarter 2014 operating earnings of 6 cents per share surpassing the Zacks Consensus Estimate of 1 cent by a whopping 500%.
Our View
Although FuelCell Energy continued to report in the red, the loss incurred in the quarter was narrower than the Zacks Consensus Estimate as well as the prior-year loss. Lower revenues notwithstanding, the cost cutting measures helped the company to cut its losses.
FuelCell Energy is currently focused on expanding its margins. Gross margin in the first quarter fiscal 2015 nearly doubled to 9.6% from 4.9% a year ago.
The company is currently progressing on the development of a number of multi-megawatt fuel cell parks. FuelCell Energy completed the shipment of a couple of orders in the quarter including fuel cell modules and fuel cell kits. The company also placed into service a 1.4 megawatt fuel cell power plant project at the University of Bridgeport for NRG Energy, Inc. (NRG - Analyst Report).
FuelCell Energy currently carries a Zacks Rank #3 (Hold)
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