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FuelCell Energy Posts Wider-Than-Expected Q2 Loss - Analyst Blog

FuelCell Energy Inc. ( FCEL ) reported second quarter of fiscal 2014 adjusted loss of 4 cents per share, wider than the Zacks Consensus Estimate of a loss of 3 cents per share. The company reported a loss of 4 cents per share in the prior-year quarter.

On a GAAP basis, the company's loss was 7 cents per share compared with a loss of 4 cents per share. The variance between GAAP and adjusted loss was due to a non-cash embedded derivative adjustment related to conversions of the senior unsecured convertible notes.

Revenue

In the second quarter of fiscal 2014, FuelCell Energy's total revenues were $38.3 million, missing the Zacks Consensus Estimate of $45 million by 14.9%. Total revenues decreased 9.7% from $42.4 million a year ago.

Lower contribution from the company's product sales and advanced technologies contract revenues primarily led to a drop in quarterly revenues. This was partially offset by higher service agreements and license revenues as a result of an increase in base installation.

Highlights of the Release

In the quarter under review, FuelCell Energy's total cost of revenues was $36.7 million, down 8.5% from $40.1 million in the prior-year quarter.

The company reported quarterly gross profit of $1.6 million compared with $2.3 million a year ago.

Total operating expenses in the quarter was $10.4 million, up 9.5% from the year-ago figure primarily due to higher administrative and selling, and research and development expenses.

FuelCell Energy's interest expenses increased 56.1% year over year to $0.89 million from $0.57 million a year ago.

In the quarter, total backlog decreased 16.4% to $342.8 million from $410 million in the prior-year quarter. Product sales, service and advanced technologies contracts backlog was $146.6 million, $181.9 million and $14.3 million, respectively.

Fuel cell shipments during the quarter were 15.7 megawatts (MW) compared with 12.6 MW a year ago.

Financial Condition

As of Apr 30, 2014, FuelCell Energy reported cash and cash equivalents and restricted cash of $89.4 million, up from $77.7 million as of Oct 31, 2013.

Total liabilities were $128.1 million as of Apr 30, 2014 compared with $191 million as of Oct 31, 2013.

In the second quarter of fiscal 2014, FuelCell Energy's net cash used by operating activities was $10.6 million.

The company spent $1.1 million in the quarter as capital expenditure.

Guidance

For the second half of 2014, FuelCell Energy expects average quarterly revenues in the range of $50 - $60 million, considering present production level.

Other Earnings Releases

Plug Power Inc. ( PLUG ) posted first-quarter 2014 loss of 6 cents per share, wider than the Zacks Consensus Estimate of a loss of 5 cents. The company reported a loss of 14 cents per share in the prior-year quarter.

Ballard Power Systems Inc. ( BLDP ) reported first-quarter 2014 loss of 3 cents per share, narrower than the Zacks Consensus Estimate of a loss of 4 cents. The company reported a loss of 7 cents per share a year ago.

Zacks Rank

FuelCell Energy currently has a Zacks Rank #3 (Hold). However, a better-ranked stock in the same industry is Covanta Holding Corporation ( CVA ), carrying a Zacks Rank #1 (Strong Buy).

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FUELCELL ENERGY (FCEL): Free Stock Analysis Report

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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.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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