What: Shares of fuel cell system provider Plug Power Inc (NASDAQ:PLUG) fell 17% in early trading Monday after it reported third-quarter earnings.

So what: Revenue rose 58% from a year ago to $31.4 million as service revenue nearly doubled to $13.4 million. Net loss also grew from $9.4 million a year ago to $10.2 million, although the loss adjusted for one-time items rose 53% to $11.4 million, or $0.06 per share.  

The first issue today is that results missed Wall Street's estimate of $30.7 million in revenue and a $0.05 per-share loss. Plug Power may also miss its revenue goal of $100 million for the year and gross margin goal of 25% for the fourth quarter, which has investors worried that financial progress is slower than expected.

Now what: A company like Plug Power reporting persistent losses needs to exceed growth estimates, and right now that's not taking place. Right now, I think the concerning figures are an 18% gross margin for product sales and a negative 26.3% gross margin for service revenue. Those figures don't show much sign of pending profitability, and that's what investors want to see.

With losses piling up, I don't see much reason to buy Plug Power shares after the drop today. The company has a lot of potential in the hydrogen business, but until it can make money, I'll remain skeptical of its prospects as an investment.

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.