Combine sky-high energy prices, Earth Day all over the news, a "green" day (financially speaking) for the markets in general, and a company that beat earnings expectations by a penny, and what do you get?

Ordinarily, for any company involved in "alternative energy," you'd expect a rocketing share price. Unfortunately, we're not talking about an ordinary company today -- we're talking about Plug Power (NASDAQ:PLUG). For all the good news plugged into this company yesterday, it somehow managed to turn investors off, dropping its shares 3%.

Everything looked rosy in Plug's Q1 earnings report, at first glance. Analysts stoically awaiting news of a 23% drop in sales were surprised to see them climb 13% instead. Those expecting a repeat of last year's $0.14-per-share loss were met instead with news of just $0.13 lost.

But was there any bad news?
Surely you jest -- this is Plug Power we're talking about. Like fellow fuel-cell travelers Ballard Power (NASDAQ:BLDP) and FuelCell Energy (NASDAQ:FCEL), Plug's earnings time is rarely a cheery occasion. A sampling of the bad news:

  • Plug received only three new orders for its GenCore power systems in Q1 2007, down from 52 orders in Q1 2006. So the product isn't exactly catching on like wildfire.
  • Plug became even more of an R&D shop last quarter. As its "product and service revenue" fell by nearly half, the proportion of its revenue depending on U.S. government subsidies soared, with R&D revenue rising 57% year over year.
  • Both the firm's commercial business and its R&D side remained firmly mired in red ink. In each case, gross margins remained negative, since it cost the firm more money to make its products and provide its services than others were willing to pay for them.
  • Despite the influx of cash interest paid on its Russian windfall, Plug managed to burn through $17.7 million in cash in Q1.

That said, by this time, I'd honestly thought investors would take the bad news as a given, and jump for joy over the good news of sales gains and less money lost. Could it be they're wising up to Plug's cash-burning ways? All those greenbacks going up in smoke can't be good for the environment.

What did we expect out of Plug last quarter, and what did we get? Find out in:

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Fool contributor Rich Smith has no position, long or short, in any company named above. The Fool has a disclosure policy.