Can Clean Energy Fuels Grow Faster?

On Wednesday, Clean Energy Fuels (CLNE -0.87%) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Clean Energy Fuels has tapped into the growing popularity and availability of cheap natural gas to help revolutionize the transportation industry with a network of fueling stations across the nation. Yet will the tiny company be able to capitalize fast enough to make investors happy? Let's take an early look at what's been happening with Clean Energy Fuels over the past quarter and what we're likely to see in its quarterly report.

Stats on Clean Energy Fuels

Source: Yahoo! Finance.

Will Clean Energy Fuels give investors an earnings surprise?
Recently, analysts have looked more favorably on the prospects for Clean Energy, having narrowed their loss estimates by more than half for the first quarter and reducing their full-year loss projection by $0.06 per share. But the stock hasn't made much headway, rising just 3% since late January.

Clean Energy seeks to revolutionize the transportation industry with its natural-gas fueling network. With recent estimates pointing to a growth of more than 25% in the supply of U.S. natural gas just since the end of 2010, the move is on to convert existing use of more expensive fuels to cheaper nat-gas. The promise of independence from foreign energy sources is also driving adoption of more gas alternatives.

But new competition has emerged that could hurt Clean Energy's prospects. With energy giant Royal Dutch Shell (RDS.A) recently teaming up with truck-stop operator Travel Centers of America (TA) to provide nat-gas fueling at its existing locations, Clean Energy isn't going to have the only distribution network in the country. Yet with General Electric (GE -2.11%) in its corner to help provide modular natural gas compression stations and better access to nat-gas fueling options generally, Clean Energy isn't without support from bigger industry players.

Still, Clean Energy Fuels has potential growth avenues from other sources. Railroad companies are taking a close look at nat-gas for powering locomotives, and with GE and Caterpillar (CAT 0.07%) ready and willing to start helping railroads make the transition from diesel engines, there'll be a need to set up fueling infrastructure on the nation's rails as well.

In Clean Energy's quarterly report, watch for the company to discuss trends in the mainstream auto industry to provide gas-powered vehicles. As it builds its network out, the one thing missing from Clean Energy's growth story is demand from the millions of drivers of ordinary cars and trucks. If those buyers can get into the picture, Clean Energy could see its growth accelerate dramatically.

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