Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of FuelCell Energy Inc (NASDAQ:FCEL) plunged as much as 11% in early trading today after reporting fiscal second-quarter results.
So what: Revenue fell 25% in the quarter to $28.6 million and net loss was $10.7 million, or $0.04 per share, which was an improvement from a $16.6 million loss a year ago. There are only two analysts following FuelCell Energy but they expected $41.3 million in revenue and a loss of just $0.02 per share.
The other concerning number was a decline in backlog from $342.8 million a year ago to $312.2 million as of April 30, 2015.
Now what: For years now FuelCell Energy has been promising a turnaround in operations and losses continue to pile up. That's one reason the decline in revenue has investors so concerned. It should be increasing revenue and pushing into new markets where there's room to grow. Instead, operations are stuck at a stagnant level and management is forced to go to shareholders for funding, selling shares regularly over the past decade.
While I see that there's potential for FuelCell Energy I don't see that potential turning into profitable results and that's why I'll stay far away from the stock right now.