Image source: Getty Images.

During a quarterly earnings report, management often presents just a sketch of how the company performed. But equally important for investors is the conference call -- on which management's commentary colors in the sketch, providing the full picture of the company's recent performance.

To that end. FuelCell Energy (FCEL 7.00%) reported disappointing second-quarter results during its recent earnings call, but that didn't stop management from optimistically opining about its future. So let's look at three of its most revealing comments.

Xes and Os for XOM

If there's one thing that's clear following this earnings call, it's that FuelCell has no shortage of adoration for ExxonMobil (XOM 0.02%). Announcing in May that the two companies will work together on pursuing carbon capture solutions, FuelCell revealed that the relationship could be a game-changer:

ExxonMobil is measuring the size of this global market in gigawatts, bearing in mind that a single gigawatt is equal to 1000 MW. One thousand MW of projects will translate into multibillion dollars of revenue for FuelCell Energy.

According to management, the relationship is already bearing fruit.

Image source: ExxonMobil corporate website.

Chip Bottone, FuelCell's president and CEO, revealed that with the agreement in place, "activities have begun that will have meaningful favorable financial impact on us short-term and much larger and sustainable impact long-term."

But before we characterize FuelCell -- whose top line totaled $163 million for fiscal 2015 -- as a company reporting billions upon billions in revenue, let's take a step back and identify events that will prove that the relationship is successfully progressing.

First, by the end of the summer, FuelCell expects to announce the location of its megawatt-scale pilot plant project. Lasting for one to two years, the pilot project will comprehensively test FuelCell's technology. If successful, the next step would be integration at a larger-scale pilot facility.

Forecasting a hot summer

Things are heating up outside, and according to management, things should continue to stay hot for the company through the rest of the year:

More than 125 MW of projects utilizing our ultra-clean and efficient fuel cell solutions have been bid to RFPs [requests for proposal] in 2016. We expect additional submittals will be made this summer. Decisions on most awards are expected over the next several months.

Of these projects, the most important is the Beacon Falls Energy Park -- a 63 MW facility to be located in Connecticut. The company is extremely confident that it will be awarded the project. Should its expectations be met, management estimates that the potential revenue of the project will be $500 million in both product and service revenue. The awarding of the contract is expected to occur later in the summer or early in the fall. Execution of the project will occur in multiple phases, beginning later in 2016.

Successful development of the project -- should FuelCell win the award -- is important for the company, since it recognizes higher margins on its larger projects; likewise, it could validate FuelCell's worth in larger utility-scale projects, leading to future contracts.

In addition to Connecticut, the company is hoping to win contracts from Public Service Enterprise Group for its service areas of Long Island and New York. In total, the projects -- ranging in size from 1 MW to 20 MW -- amount to 40 MW in multiple locations.

Marginally good news

FuelCell Energy, like most fuel cell companies is unprofitable. Moreover, like its peers, it claims it's close to achieving breakeven on an EBITDA basis. 

During its second-quarter earnings presentation, the company revised its breakeven targets. Instead of EBITDA breakeven at 70 MW to 80 MW, the company is targeting 50 MW to 60 MW.

To what does the company owe the pleasure of the revision? FuelCell is coming up on the end of its current order with POSCO Energy of fuel-cell kits at the end of 2016. According to Michael Bishop, FuelCell's senior vice president and CFO, this is not bad news, as it represents "pretty low-margin business." 

The company will be replacing this loss with higher-margin business, designing and bring power plants online. Otherwise known as engineering, procurement, and construction (EPC), the orders come from projects in the United States and Europe. With margins in the low to mid-teens, the EPC turnkey projects lead to service agreements which have higher margins -- in the low to mid-20s.

The takeaway

Primarily, investors should be looking for news announcing the winner of the Beacon Falls Energy Park. Should FuelCell not win the contract, it would be an extreme disappointment. More importantly, though, it could be a harbinger of more disappointing news regarding future awards.

In addition to Beacon Falls, investors should look for confirmation that the carbon-capture project is progressing as planned. After all, this may be the company's golden ticket.