Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



FuelCell May Be Turning the Corner

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

What happens to a company that gets a single order worth more than 1.5 times last year's sales? For FuelCell Energy (Nasdaq: FCEL  ) your stock shoots through the roof, reversing a downtrend for the stock for nearly two months.

On Tuesday, FuelCell announced a 70 MW order from POSCO Power, a subsidiary of POSCO (NYSE: PKX  ) , that will keep the company busy for the next two years. The order is for at least $129 million, or more than five times the company's last quarter revenue. At the end of last quarter, the company was running at just 35 MW of capacity annually, so production will be full with just this one order.

Fuel cells are a promising technology that has given FuelCell and Ballard Power Systems (Nasdaq: BLDP  ) growing revenue, but profits have been elusive so far. The hope is that growing economies of scale will help the companies push into profitability, and orders like this are a step in that direction.

Recently, gross margins have improved from -23.2% a year ago to -6% in the fourth quarter and flat in the first quarter of this year. With sales likely to keep rising from $25.8 million last quarter FuelCell is getting close to busting into profitability.

Sales pace picking up
An improving contract backlog is a sign of future growth. FuelCell received an $11.7 million contract to develop a clean-coal fuel cell power plant, a research contract for biogas and carbon capture, and fuel cell sales in London and California. As research deals lead to more capabilities for the company, it will help expand offerings to stay ahead of competitors.

Big power players General Electric (NYSE: GE  ) and United Technologies (NYSE: UTX  ) are also getting into the fuel cell business, but right now FuelCell Energy looks to have some momentum.

Interested in reading more about FuelCell Energy? Click here to add it to My Watchlist to find all of our Foolish analysis on this stock.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (1) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1502463, ~/Articles/ArticleHandler.aspx, 10/22/2016 1:58:37 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 16 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
FCEL $5.10 Down -0.20 -3.77%
FuelCell Energy CAPS Rating: *
BLDP $2.16 Down -0.02 -0.92%
Ballard Power Syst… CAPS Rating: *
GE $28.98 Down -0.09 -0.31%
General Electric CAPS Rating: ****
PKX $53.42 Up +0.16 +0.30%
POSCO (ADR) CAPS Rating: ****
UTX $98.67 Down -0.62 -0.62%
United Technologie… CAPS Rating: ****