Clean Energy Fuels Corp. Earnings: Will the Stock Bounce Back?

On Thursday, Clean Energy Fuels (CLNE) will release its quarterly report, and shareholders are still reeling from the hit that they took earlier this year. Some investors believe that the prospect of new battery technology from Tesla Motors (TSLA -1.74%) makes it a competitor to the natural-gas network, but Clean Energy Fuels remains convinced that, with natural-gas truck engines from Westport Innovations (WPRT -2.95%) and other manufacturers set to take advantage of lower nat-gas prices, its network will remain a critical link for commercial transportation once more trucking companies start converting.

Natural gas is a huge opportunity given its abundance, but it has historically not been used as a major source of transportation fuel because of a lack of infrastructure. Clean Energy Fuels has sought to change that by providing a nationwide network of nat-gas fueling stations for vehicles that use the fuel. With the prospect of competing networks and concerns about rising natural gas prices recently, can Clean Energy Fuels keep growing? Let's take an early look at what's been happening with Clean Energy Fuels during the past quarter, and what we're likely to see in its report.

Source: Clean Energy Fuels.

Stats on Clean Energy Fuels

Source: Yahoo! Finance.

Can Clean Energy Fuels earnings get back on track?
Analysts have gotten a lot more pessimistic about their views on Clean Energy Fuels earnings in recent months, widening their first-quarter loss estimates by more than $0.10 per share, and almost tripling their full-year 2015 loss projections. The stock has gotten rocked, as well, falling 23% since the end of January.

Two events were primarily responsible for the drop in Clean Energy Fuels stock. In early February, a Seeking Alpha report argued that compressed natural gas was a better solution than liquefied natural gas, and shares sank dramatically despite reassurances from Clean Energy Fuels that the company has just as much capacity to provide CNG services as LNG services. Then, though, Clean Energy Fuels disappointed investors with its fourth-quarter earnings later that month, which showed revenue declining 14%, and a wider loss than expected. With delivery volumes growing at just a 13% pace, Clean Energy Fuels didn't demonstrate the huge growth potential that shareholders want to see over the long run.

Source: Clean Energy Fuels.

Clean Energy Fuels isn't the only company struggling from the slow adoption of natural-gas technology. Westport Innovations also saw its growth decelerate abruptly. At issue is the rise in natural gas prices during the winter, which exposed the downside of committing to expensive nat-gas conversions. If prices keep climbing, then it'll take longer for conversions to pay off from a fuel-cost savings standpoint, and that could deter many users from getting those modifications made, hurting both Westport and Clean Energy. Still, Clean Energy Fuels is working hard to strengthen its position, opening two new LNG stations about a month ago, and announcing a broader partnership with delivery giant UPS to use the new stations as part of its growing network.

The bigger question facing Clean Energy Fuels is whether natural gas will prove to be the winning technology for transportation. Some see Tesla Motors and its newly announced gigafactory for battery production as affirming the advantages of electric vehicles over fossil-fuel driven trucks. Yet, Clean Energy CEO Andrew Littlefair believes that Tesla is not a competitor, noting that it could take decades for battery technology to advance far enough to allow for the heavy loads that truckers carry.

In the Clean Energy Fuels earnings report, watch closely to see how well the company is dealing with its ongoing losses. With high-profile backing from energy pioneer T. Boone Pickens, Clean Energy Fuels has potential financial support; but that doesn't mean it can go on losing money indefinitely without having negative consequences for shareholders.

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