FuelCell Energy Shares Fall upon Earnings Report, Management Not Too Worried

Wednesday, June 4, 2014, FuelCell Energy FCEL shares declined after the release of their earnings for the second-quarter in 2014. Despite posting a loss-per-share of $0.04, management spoke optimistically about the company's performance in their conference call Wednesday morning, by highlighting FuelCell's changing business model, current operations and future operations.

Changing Business Model

• CEO Arthur Bottone spoke proudly of FuelCell Enery's new business model to cut down time on projects.
• Bottone made note on cutting the due diligence time, FuelCell Energy is in position to increase project completion speed.
• Through partnerships with investors or owners of different sites, FuelCell Energy plans to operate fuel cell plants while leaving management of the site to the owner, thus increasing the presence of the firm.

Current Operations

• Management spoke about current partnerships with Costco COST and universities to provide FuelCell Energy goods and services.
• The total backlog, in megawatts, was down for FuelCell Energy, but the total dollar value of backlog was up.
• Management spoke of having enough liquidity and inventory to cover short-term debts.
• The company reported that the smallest project FuelCell Energy does today is $5-6 million.

Future Operations

• Through its partnership with Costco, FuelCell is opening a 59 megawatt plant in South Korea.
• FuelCell is constructing a university project with a ticket price of $7-8 million and expects commercial operations in the fall.
• The company is seeking to convert more operations to a turnkey business model as it is advantageous to both investors and owners.

FuelCell Energy shares traded down seven percent to $2.20 at the time of publication.