Why FuelCell Energy's Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of FuelCell Energy (NASDAQ: FCEL  ) jumped as much as 14.6% today after the company reported earnings.

So what: Revenue rose 81% in the most recent quarter to $53.7 million and net loss fell to $5.6 million, or $0.03 per share. The company also announced a partnership with NRG Energy (NYSE: NRG  ) , who will market fuel cells to larger end users who can either buy a system or fuel cell power from NRG.  

Now what: The earnings report was solid but the NRG partnership may be even bigger news today. The investment thesis in FuelCell revolves around the company growing revenue quickly and there may not be a better partner than the largest independent power supplier in the country. I'm not buying the stock today just based on expected losses well into next year but if FuelCell flips to a profit earlier than expected I'll reevaluate the stock.

Interested in more info on FuelCell Energy? Add it to your watchlist by clicking here.


Read/Post Comments (3) | Recommend This Article (1)

Comments from our Foolish Readers

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  • Report this Comment On September 05, 2013, at 4:19 PM, speculative1 wrote:

    A 9.8% hop is not much of a jump given their overall improvements in their numbers and the news which was unveiled at their meeting. Maybe they should have waited a couple of weeks to release the news about NRG and their partnerships which was probably the catalyst news for FCEL.

    How disappointing...other companies with less than reported results and no news at all would have shot up further. No forward guidance was really revealed directly, but reading between the lines, it almost seems that FCEL will be in profit positive territory and a stellar revenue increase beginning with the next quarter. Lets see how they can translate that into a gain instead of .03 cents share net loss/share. Using todays numbers, it appears they need to generate 60 million in revenue just to break even. Hopefully the megawatts they will be delivering would cover that.

  • Report this Comment On September 06, 2013, at 12:06 AM, mrconnors0531 wrote:

    Posco is the key. I believe that they will soon make a bid for fcel in the $4 to $5 area.

  • Report this Comment On September 11, 2013, at 2:11 PM, HvyOnEzFool wrote:

    Several search engines have linked NRG and Luminant from prior business dealings. What impact if any could Luminant’s looming bankruptcy have on NRG?

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