What happened

Fuel cell industry bellwether Plug Power (PLUG 2.92%) issued a business update yesterday, giving investors a preview of what it expects to report when its official earnings come out next week. Today, shares of FuelCell Energy (FCEL -2.46%) stock are down 3% as of 9:40 a.m. EDT.

If you think those two events are connected, you're probably right.

Glowing red stock chart arrow trending down

Image source: Getty Images.

So what

As my colleague Scott Levine reported yesterday evening, Plug Power issued its update after close of trading Monday, and the news wasn't great. Although Plug boasted of gross billings that will be over $70 million, and up more than 60% year-over-year, actual revenue for the quarter will probably be only $67 million.

On the one hand, both those numbers appear to fall short of analysts' consensus target for $77.3 million in first-quarter revenue, reports TheFly.com -- a disappointment. On the other hand, with Plug currently running $100 million in negative revenue on its income statement, the Q1 report will apparently leave the company in a state of negative trailing revenue for another quarter -- an even bigger disappointment for investors.

Management remains optimistic, predicting gross billings will increase again, to $105 million or more in the second quarter, and revenue will rise to $102 million in that quarter, at which point Plug will be back in the black (for trailing revenue, at least). Still, even the Q2 guidance reinforces the view that Plug's gross billings -- the number it most often emphasizes in its earnings reports -- really doesn't have as close a relationship to revenue according to generally accepted accounting principles (GAAP), as investors may have assumed.

Now what

What does this mean for FuelCell, which, after all, is an entirely separate company from Plug, and which reported no negative news at all today (or yesterday, either)?

At first glance, you might not think Plug's news has anything to do with FuelCell at all, but here's the thing: Plug is currently both the strongest company in the fuel cell sector and the clear investor favorite. Although unprofitable and burning cash, Plug has more than $1.3 billion in cash in the bank, according to the latest data from S&P Global Market Intelligence, and a market capitalization well in excess of $12 billion. Compared to FuelCell -- also unprofitable and burning cash, and with a market cap of only $2.3 billion and less than $200 million in cash -- Plug's in much finer financial fettle.

But by now it's become clear that even Plug is not nearly as healthy as analysts thought it was, and investors have sold off Plug stock by 72% since January. What's bad news for Plug could be even worse news for FuelCell.