What happened

Ballard Power Systems (NASDAQ:BLDP), a global leader in fuel-cell solutions, had plenty of cause to rejoice through the first four months of 2017: Shares skyrocketed more than 92% from the start of the year through April. But May was less than kind to the company as shares dropped 13% through the month following a mixed earnings report.

So what

Over the past year, Ballard has announced several deals for various heavy-duty vehicle applications in China, proving the company -- like its peers -- has achieved its goal of expanding its presence in the Asian market. The value of these deals was clearly illustrated in the company's first-quarter earnings report. For example, revenue grew 39% year over year, but the growth was largely attributable to a 120% year-over-year gain in the heavy-duty motive business. This gain, according to management's comments from the conference call, was "largely related to deliveries into the China market."

A financial chart shows arrows pointed down.

Image source: Getty Images.

Auspicious as this may seem, it was not enough to distract investors from the revenue challenges Ballard encountered in its other businesses. The company reported year-over-year declines of 53% and 46% in its portable power and material handling segments, respectively. Management cited lower stack shipments to Plug Power (NASDAQ:PLUG) and lower average selling prices as the culprits for the drop-off in the material handling business.

In other disheartening news, investors learned that Ballard is still waiting for Milestone C on the company's trek to gain Program of Record status for its Squad Power Manager solution. On its Q4 2015 conference call, management revealed its hope of achieving Milestone C in late 2016 -- a feat that would "trigger significant scaling." On the most recent conference call, though, management was vague about Milestone C moving forward, stating simply that it "continues to expect this milestone in 2017."

Now what 

Referring to a "a record order book and sales pipeline for 2017 delivery," Ballard's management appears optimistic that the successes the company achieved in the first quarter are merely prologue to further success throughout the rest of the year. Investors should be circumspect, though. There's no doubt that fuel-cell companies have enjoyed many successes -- take Plug Power's recent deal with Amazon, for example -- but what they have continually failed to do is show how these victories translate to profitability.

In the coming quarters, investors who are encouraged by Ballard's recent success will surely want to monitor the company's progress in achieving Milestone C and its further progress in the Chinese market.