What happened
It's shaping up to be another down day in the markets. The dour overall market sentiment, however, is hardly the only factor contributing to the precipitous decline that shares of Bloom Energy (BE -1.54%) are experiencing this morning. The main factor pushing investors to exit their positions in the hydrogen stock is the company's surprisingly poor first-quarter 2022 earnings report, which was released after the market closed yesterday.
As of 10:25 a.m. ET, shares of Bloom Energy have fallen 17.9%.
So what
Failing to meet analysts' expectations that the company would book Q1 sales of $216.5 million, Bloom Energy announced that it generated $201 million on the top line. But the shortcoming on the top of the income statement, in all likelihood, isn't the main thing electrifying the bears' pessimism. Instead, it's the company's shortcoming on the bottom line that's likely motivating the sell-off. Whereas the consensus among analysts was that the company would report a $0.10 loss per share, the company reported a loss per share of $0.44.
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Digging into the income statement a little further, investors are likely disappointed to find how the company's performance in some areas led to the steep loss. In particular, the year-over-year decline in Bloom Energy's service business appears particularly surprising. Whereas the company generated a 2.7% gross margin on its service business in Q1 2021, this contracted significantly in the recently completed quarter and resulted in a loss, representing a negative gross margin of 16.2%.
Now what
The pessimism surrounding the fuel cell stock today is unsurprising considering the bearish market sentiment writ large and the company's unexpectedly wide loss on the bottom line. Despite the company's apparent challenges in the first quarter, management seems upbeat about the remainder of 2022. In addition to projecting 2022 revenue of $1.1 billion to $1.15 billion, management expects the company to report positive cash from operations. For context, the company generated 2021 revenue and operating cash flow of $972 million and negative $61 million, respectively.
