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Why FuelCell Energy Stock Just Slid 17%

By Rich Smith – Sep 10, 2020 at 12:22PM

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Sales beat expectations in the company's fiscal Q3, but declined. And on the bottom line, its loss was worse than expected.

What happened

Shares of alternative energy pioneer FuelCell Energy (FCEL 0.59%) were in freefall Thursday morning, sliding by 17% through 11:45 a.m. EDT after it reported a sales beat -- but an earnings miss.

Analysts had predicted that the hydrogen fuel cell company would lose $0.06 per share on $16 million in sales for its fiscal 2020 third quarter, which ended July 31. As it turned out, FuelCell beat the revenue goal, reporting $18.7 million in sales, but its loss was $0.07 per share.  

Glowing red stock chart arrow trending down

Image source: Getty Images.

So what

Worse, even that revenue "beat" was kind of underwhelming. In fiscal 2019's Q3, FuelCell delivered sales of $22.7 million -- so the $18.7 million it collected last quarter actually represented an 18% year-over-year decline.  

And that's actually the good news, relatively speaking, because FuelCell's bottom-line loss of $15.3 million was way worse -- nearly triple what it lost a year ago. The only reason the loss per share declined from $0.18 to $0.07 was because FuelCell has diluted its shareholders significantly in the interim, resulting in about more 50% more shares outstanding this year than last.

Oh, and pre-tax operating losses jumped 10-fold, to $10.8 million.

Now what

CEO Jason Few tried to put an upbeat spin on the results, saying he is "excited about our progress toward fulfilling our purpose of enabling a world empowered by clean energy." But investors clearly weren't as enthused.

And based on these numbers, I can't really blame them.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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FuelCell Energy, Inc. Stock Quote
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