Credit: Shutterstock photoShares of FuelCell Energy Inc. FCEL are trading over 10% higher today following news that the company will install a 5.6 megawatt fuel cell power generation system for drug maker Pfizer PFE .
The system will produce reliable low carbon electricity and steam for Pfizer's 160 acre facility in Groton, Connecticut. Pfizer will purchase the power and steam under a 20-year purchase agreement that should lead to a reduction in overall energy costs.
"This power purchase model delivers immediate value while increasing electrical reliability by providing the security of on-site power with a financial structure that avoids an investment in power generation assets, and FuelCell Energy installs, operates and maintains the fuel cell power plants," said FuelCell Energy CEO Chip Bottone.
This news is a much-needed breath of fresh air for the struggling energy company. Shares of FuelCell fell about 70% in 2015, and yearly revenues missed expectations by about 33%. In the fourth quarter of fiscal 2015, FuelCell reported a loss of 30 cents per share, much wider than the Zacks Consensus Estimate of -$0.27.
FCEL investors will be hopeful that this new source of income will change the stock's fortune. Revenues were weak last year, but locking in a big customer for the next two decades is certainly a good start to FuelCell's 2016.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
