In my Dec. 9 article entitled "What to Look for With This Fuel Cell Company's Results" I thought I was a pitching slow softball, figuring FuelCell Energy (FCEL 15.73%) would easily hit most if not all of the items on the list. What a shock and disappointment to find out that the company missed almost across the board. While there's still plenty of hope for the long-term future, the stock deservedly got crushed following the earnings report.

Results
FuelCell Energy reported fiscal fourth-quarter results on Dec. 16. Revenue zoomed 55.9% to $55.2 million. Gross profit leaped 189% to $2.6 million. Backlog hopped 11% to $355.4 million. The company maintained an annual run-rate of 70 megawatts at its North American facility, an increase of 25%. Overall, it sounds pretty good, doesn't it? The problem is those are year-over-year numbers. The market was expecting much better results compared to the third quarter just prior.

Then (third quarter 2013) and now (fourth quarter 2013)
Then, FuelCell Energy had reported a 26.5% sequential jump in revenue to $54 million. This report's sequential jump is only a gain of 2%.

Then, gross profit had hit an all-time record of $4.5 million or 8.4% of sales. Now, gross profit plunged 42% to $2.6 million or 4.8% of sales.

In the third quarter conference call, which was halfway through the fourth quarter, CEO Chip Bottone stated, "We anticipate continuing to produce at 70 megawatts and will increase production further as backlog and lead times support." Backlog is at over seven quarters' worth now. Production stayed flat in the fourth quarter.

In the same call, Bottone stated, "Our margins are expanding from higher production levels as fixed costs are absorbed by the greater sales volume and cost reductions flow through the financial statement." Notice the present-tense word expanding as opposed to expanded, implying that it is ongoing and investors should expect further margin expansion. It didn't happen, and instead margins actually collapsed.

Now rewind back to the first quarter conference call from March of this year. CFO Michael Bishop stated then, "When we think about the business model going out a couple of quarters, we're targeting margins in the double digit range." It came in nowhere close. This is starting to sound like Plug Power (PLUG 6.63%).

Plug Power
Plug Power sometimes feels like it wrote the book on over-promise and under-deliver. Plug Power has been forecasting improving profit margins, and CEO Andy Marsh pegged material costs of fewer than 70% of sales as the ticket to profitability. Over four years ago, he stated, "We will continue to grow our business and forge a path to profitability in 2009." In August 2012, with shareholders still waiting for profits, he targeted material costs of fewer than 60% for 2013 and the prize of profitability. First half of 2013, he assured the market that worst case would be 67% material costs. By Q3, the worst-case 67% became the new hopeful target. 2013 is almost over and all those targets have failed. 2014 is now the magic year. FuelCell Energy is starting to sound more like these Plug Power misses and less like Tesla Motors (TSLA 2.43%) and its history of over-delivering on margins.

Lessons from Tesla
For Tesla, it's the opposite story. Excluding tax credits, Tesla has been beating its own guidance for margins every quarter. For the first quarter, gross profit margin excluding federal tax credits was at 5%, and Tesla guided it to rise to 9%-12% by the second quarter. In the second quarter it instead came in at 13% and Tesla guided it to rise to 19% for the third quarter. In the third quarter it instead came in at 21% and Tesla guided it to rise to 25% for the fourth quarter. Do I hear 27%? FuelCell Energy and Plug Power should pay attention to what Tesla's doing.

Foolish final thoughts
The market punishes those who over-promise and under-deliver. FuelCell Energy is starting to go down Plug Power's path. While those promises can make for short-term bumps, Fools may want to avoid buying into those bumps only to see lower stock prices later, as has been the case with Plug Power for years. Consider waiting on the sidelines for FuelCell Energy to bring less top-brass promise and more bottom-line results.