Fuelcell Energy Stock Earnings: Despite FCEL missing Q2 forecast, earnings call strikes optimistic tone

• Fuelcell Energy reported Q2 adjusted EPS of $-0.08 on revenue of $16.4 million.
• Analysts had forecast EPS of $-0.05 on $32.3 million in revenue.
• FCEL stock price is down 10% to $3.66.

Fuelcell Energy (FCEL) posted earnings results that missed expectations early Thursday. For the fiscal second quarter, the quarter ending in April, Fuelcell reported an adjusted earnings per share loss of 8 cents on revenue of $16.4 million. The EPS was 3 cents below expectations, but the revenue figure was little more than half of the forecast. FCEL stock immediately dropped 10% to $3.66.

Wall Street had expected a $-0.05 adjusted EPS loss on $32.3 million in revenue from the producer of hydrogen fuel cell power plants. This compares to a $-0.05 adjusted EPS on $31.8 million in revenue in the most recent quarter – the fiscal first quarter of 2022 that ended in January.

"During our Investor Day, we highlighted the approximately $2 trillion in combined, cumulative total addressable market opportunities through 2030, which we believe may be served by our commercially available solutions and solutions that are actively under development by the company," said FuelCell Energy CEO Jason Few in a statement. "We also shared our aspiration to have a substantial impact on addressing climate change and deliver revenue of over $300 million by the end of fiscal year 2025 and revenue of over $1 billion by the end of fiscal year 2030. In order to reach these goals, we are, among other things, investing in commercializing our technologies and adding to our capabilities, both in terms of manufacturing capacity and talent.”

Fuelcell Energy Earnings Call: Projects continue with US Navy, Toyota, ExxonMobil

Despite missing revenue projections, revenue was still 17% higher YoY when compared to the quarter last year. The net loss of $30.1 million was much higher than last year's fiscal Q2 loss of $18.9 million. This was primarily due to higher marketing and administrative costs as well as an uptick in R&D.

Fuecell Energy management said they were expanding to South Korea as a hub for future engagement with the Asian market. In South Korea itself, district heating and distributed hydrogen were both named is commercial focuses for the company there.

"We see about 40% of the future of our business in the US, and we see 60% coming from the rest of the world," said CEO Jason Few.

The company is nearing completion on a project with Toyota on a 2.3 MW "tri-gen" utility project that produces electricity, hydrogen and water at the Japanese car maker's Port of Long Beach operation in California. Additionally, it has already commissed the first platform at its 7.4 MW power plant for the US Navy's submarine base in Groton, Connecticut, and is in the process of commissioning the second part.

Another project carried out jointly with ExxonMobil is working on fuel cell carbon capture and storage technology and will be expanding in scope to last through the end of 2022. Two other projects with Canadian National Resources and DRAX are continuing their deployment of carbon capture fuel cell systems.

Fuelcell Energy Stock Forecast: Earnings call reduces pessimism

The earnings call that began at 10 AM EST has helped FCEL from its major losses during the premarket. Though shares were down as much as 10%, 90 minutes into the regular session they have have recovered and now are down just 2.2% at $3.98. This is a very good sign that the market is forgiving the earnings miss and focusing on the future.

The FCEL share price has actually almost touched the 9-day moving average, which has been leading the 21-day moving average since the start of June. The Moving Average Convergence Divergence (MACD) has also been trending higher as the latest bear market rally has helped growth stocks. My own feeling is that FCEL is likely to consolidate between $3.50 and $4.25 for awhile before making a run at $4.75, where resistance lingers from early May. Breaking $4.75 will lead to a further rally.

FCEL daily chart