Can Clean Energy Fuels Grow Faster?

On Wednesday, Clean Energy Fuels (NASDAQ: CLNE  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Clean Energy Fuels has tapped into the growing popularity and availability of cheap natural gas to help revolutionize the transportation industry with a network of fueling stations across the nation. Yet will the tiny company be able to capitalize fast enough to make investors happy? Let's take an early look at what's been happening with Clean Energy Fuels over the past quarter and what we're likely to see in its quarterly report.

Stats on Clean Energy Fuels

Analyst EPS Estimate

($0.07)

Year-Ago EPS

($0.16)

Revenue Estimate

$99.14 million

Change From Year-Ago Revenue

35%

Earnings Beats in Past 4 Quarters

3

Source: Yahoo! Finance.

Will Clean Energy Fuels give investors an earnings surprise?
Recently, analysts have looked more favorably on the prospects for Clean Energy, having narrowed their loss estimates by more than half for the first quarter and reducing their full-year loss projection by $0.06 per share. But the stock hasn't made much headway, rising just 3% since late January.

Clean Energy seeks to revolutionize the transportation industry with its natural-gas fueling network. With recent estimates pointing to a growth of more than 25% in the supply of U.S. natural gas just since the end of 2010, the move is on to convert existing use of more expensive fuels to cheaper nat-gas. The promise of independence from foreign energy sources is also driving adoption of more gas alternatives.

But new competition has emerged that could hurt Clean Energy's prospects. With energy giant Royal Dutch Shell (NYSE: RDS-A  ) recently teaming up with truck-stop operator Travel Centers of America (NYSE: TA  ) to provide nat-gas fueling at its existing locations, Clean Energy isn't going to have the only distribution network in the country. Yet with General Electric (NYSE: GE  ) in its corner to help provide modular natural gas compression stations and better access to nat-gas fueling options generally, Clean Energy isn't without support from bigger industry players.

Still, Clean Energy Fuels has potential growth avenues from other sources. Railroad companies are taking a close look at nat-gas for powering locomotives, and with GE and Caterpillar (NYSE: CAT  ) ready and willing to start helping railroads make the transition from diesel engines, there'll be a need to set up fueling infrastructure on the nation's rails as well.

In Clean Energy's quarterly report, watch for the company to discuss trends in the mainstream auto industry to provide gas-powered vehicles. As it builds its network out, the one thing missing from Clean Energy's growth story is demand from the millions of drivers of ordinary cars and trucks. If those buyers can get into the picture, Clean Energy could see its growth accelerate dramatically.

Learn more about Clean Energy Fuels and the movement toward alternative energy by reading The Motley Fool's premium research report on the company. Just click here now to claim your copy today.

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  • Report this Comment On May 06, 2013, at 11:05 AM, TMFVelvetHammer wrote:

    Nice quick summary, Dan. I'm going to the shareholder meeting on Wednesday and hope to get a better insight about Managements plans re: cash flow, debt, and the rapid expansion. This year is a big deal, with the new NG engine from Cummins-Westport out now for big rigs. Interested to hear what they expect going forward....

  • Report this Comment On May 06, 2013, at 3:28 PM, stevedc2013 wrote:

    It only things were so simple. Here's what international and U.S. energy and transportation officials say about natural gas and diesel as transportation fuels:

    - ExxonMobil: diesel will surpass gasoline as the number one global transportation fuel by 2020.

    Although natural gas will play a greater role as a transportation fuel by 2040, it remains only a small share of the global transportation fuel mix, at 4% by 2040, up from today’s 1%.

    - The World Energy Outlook (WEO) finds that diesel fuel will remain the “dominant” growth fuel between now and 2035, according to the International Energy Agency (IEA). Globally, the report suggests the possibility of only a two percent share of natural gas in the heavy duty transport market by 2035.

    - The National Petroleum Council in its 2012 report “Advancing Technology for America’s Transportation Future” for the U.S. Department of Energy stated: “Diesel engines will remain the powertrain of choice for HD (heavy duty) vehicles for decades to come because of their power and efficiency."

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