Capstone Turbine (NASDAQ:CPST) will release its quarterly report on Thursday, and the microturbine-maker's stock has climbed to nearly two-year highs on optimism for the company's future. Yet those positive results haven't resulted in Capstone earnings going from losses to profits, and investors are getting impatient for the company to produce the net income they've waited for a long time to see.

Capstone's products allow users to generate power in hard to reach areas, and the company has done an increasingly good job identifying niche areas like out of the way oil and gas drilling sites where access to the power grid isn't available. But will the boom in energy last long enough for Capstone to become profitable? Let's take an early look at what's been happening with Capstone Turbine over the past quarter and what we're likely to see in its quarterly report.

Stats on Capstone Turbine

Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$34.28 million

Change From Year-Ago Revenue


Earnings Beats in Past Four Quarters


Source: Yahoo! Finance.

How will Capstone earnings fare this quarter?
Analysts have gotten just the tiniest bit more pessimistic about prospects for Capstone earnings in recent months, having kept their June-quarter estimates steady but having cut their full-year 2014 predictions by a penny per share. The stock, though, hasn't hesitated to advance, with a 66% gain just since early May.

Capstone has done a good job lately of increasing its order flow, with a wider variety of customers seeking its microturbine products. Although oil and gas production and distribution companies have been among the most frequent purchasers of Capstone microturbines lately, including deals in April for Chinese and Russian energy companies, Capstone has also attracted attention from business ranging from coal miners to mass transit systems.

Unfortunately, Capstone failed to deliver on its March-quarter earnings prospects when it announced in June. An 18% gain in sales kept the company in a loss position for the quarter, and the slower-than-expected revenue growth send shares down sharply.

One huge threat to Capstone's growth path comes from the big increase in residential solar installations. With SolarCity (NASDAQ:SCTY.DL) having pioneered the residential solar space with its innovative financing options, SunPower (NASDAQ:SPWR) and other bigger solar players have started paying attention, and the result could be a flood of new home and small-business solar installations. Clearly, solar won't work for all the uses Capstone has identified, but by taking away some of the novelty of Capstone's on-site power generation, SolarCity's and SunPower's success could come at Capstone's expense.

In the Capstone earnings report, watch for the company to detail its latest order prospects. It'll be critical for Capstone to keep growing without revenue hiccups, or else the stock could easily give up all the hard-fought gains it's made in recent months.

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