FuelCell Energy (Nasdaq: FCEL) recently posted its first-quarter results, and its stock surged nearly 7%. Even better, the company's stock price more than doubled this year alone -- a jaw-dropping figure by any standard.

What's energizing the stock? The answer lies primarily in FuelCell's expanding partnership with South Korean utility company POSCO Energy.

POSCO power
The world's third-largest steelmaker and FuelCell's largest shareholder, POSCO plans to buy 20 million FuelCell shares for a total of $30 million, increasing its current stake from 19% to 22%.  

The good news doesn't end there. In addition to its existing order for 70-megawatt fuel cell units, POSCO has placed another 120-megawatt multi-year order for the units, which will be used to power telecom towers and households in remote areas where grid power is not available. The delivery period for this order stretches from 2013 through 2016. The huge deal should help ensure better capacity utilization, decreased costs, and improved margins in the process.

Dealing well
Although this partnership qualifies as the biggest partnership yet for FuelCell, it also has developed strategic collaborations with other companies in order to expand its global footprint.

Late last year, the company teamed up with Spain-based Abengoa to develop local stationary fuel-cell power plants. That deal enables FuelCell to operate in areas such as Europe and Latin America. More recently, the company also entered into a joint venture with Germany-based Fraunhofer IKTS that will further enhance the presence of its fuel-cell power plants in European countries.

Numbers that speak for themselves
Revenue increased by 11%, to $31.3 million, mainly because of the 15% increase in the company's product sales. What I also found encouraging was the fact that FuelCell had a record-high backlog of $184 million at the end of January 2012, which doesn't even take into account the new 120-megawatt order from POSCO.

Although the company hasn't reported an annual profit since 1997, it is gradually coming out of the red. In the most recent quarter, FuelCell showed a loss of $6.7 million, lower than the $7.3 million reported by fellow fuel-cell company Ballard Power (Nasdaq: BLDP). Ballard's revenue for the quarter remained flat, while the 12-month order book stood at $45.3 million as of year's end.

While the company's loss of $0.05 per share was better than the $0.06 per share estimated by analysts, FuelCell faces intense competition ahead. Ballard may be the least of FuelCell's worries, with giants like General Electric and United Technologies increasing their presence in the market. Both are developing fuel cells for commercial applications, and with better financial resources, this may be a real cause for concern.

The Foolish takeaway
FuelCell looks good to grow despite its losses. Expanding partnerships and new orders should provide it with the necessary fuel for growth in future. And the renewed POSCO partnership sure brightens my day.

What do you think? Keep a tab on FuelCell Energy by adding it to MyWatchlist.