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Why Clean Energy Fuels Stock Dropped 15% Friday

By Rich Smith - Nov 3, 2017 at 1:32PM

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A big earnings miss pollutes Clean Energy's quarter.

What happened

"Unclean! Unclean!" That was the refrain heard across Wall Street this morning after Clean Energy Fuels (CLNE 2.01%) reported a big $0.62 per-share loss for the fiscal third quarter -- far worse than the $0.13 per-share loss that analysts had anticipated. Clean Energy's $81.8 million in Q3 revenue likewise fell short of Wall Street's predicted $84.2 million.

As of 12:20 p.m. EDT, Clean Energy Fuels stock was trading down 14.6%.

Gas flames

Natural gas sure is pretty. Sadly, Clean Energy stock's earnings results were not. Image source: Getty Images.

So what

Clean Energy Fuels actually reported its earnings last night, after the close of trading. Thus, this morning was the first chance traders had to react to the news -- and react they did.

The provider of fuel for natural gas-fueled vehicles said yesterday that it increased the volume of fuel it delivered in the quarter and cut its operating costs, "closing 42 underperforming and unprofitable stations." Nevertheless, falling revenue combined with rising cost of goods sold to force Clean Energy to report its second money-losing quarter in a row, and its fourth quarterly loss out of the last five.

Now what

Clean Energy CEO Andrew Littlefair says the company is "making efforts to streamline the number of stations we operate without disrupting volumes or customers' ability to continue to fuel with us," and is focusing on its "most profitable opportunities" in order to "improve our overall financial performance."

He did not, however, provide any guidance on how much he expects these moves to improve Clean Energy's performance next quarter -- if at all.

As for Wall Street, analysts expect to see continued, but smaller, losses in Q4 (about $0.13 per share) on rising revenues. Of course, at last report, the same analysts were predicting that Clean Energy Fuels would show a profit within the year. After Q3's big loss, that no longer seems to be an option.

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