FuelCell Energy’s (NASDAQ: FCEL) shares have gained 118% over the past three months and 32% over the past one month. The company delivered better-than-expected revenues for its second quarter of 2020 while net loss was narrower than last year and in line with analysts’ expectations.
Revenues jumped 105% to $18.9 million year-over-year while net loss was $0.07 per share compared to $2.06 per share last year. Operating expenses decreased 41% to $8.3 million. Backlog increased 6% to $1.34 billion.
FuelCell experienced delays in bids and product solicitations as the coronavirus outbreak hindered its operations. The company also faced challenges in its sales efforts as its customers battled their own business disruptions due to the health crisis.
FuelCell’s manufacturing facility in Torrington, Connecticut was closed during the pandemic and is expected to reopen on June 22. The company incurred $1 million in manufacturing variances due to the closure in the quarter which impacted gross profit.
During this period, FuelCell carried on the construction of its 7.4MW project in Groton, Connecticut and also started construction on its San Bernardino biofuel project.
As part of its Powerhouse strategy, the company undertook several restructuring initiatives that helped deliver annualized cost savings of around $15 million. The company obtained long-term financing for generation projects including Tulare and also a new loan through Connecticut Green Bank. As part of its expansion efforts, FuelCell is also collaborating with channel partners on pan-European opportunities including sub-megawatt applications.
“We also remain committed to regaining access to markets across Asia. There is a growing global appreciation for our technology platforms. They are multi feature capabilities ranging from use of onsite biofuels, microgrid applications, carbon capture and hydrogen. We intend that international growth will be part of our go-forward strategy.” – Jason Few, CEO
Long-term growth plan
FuelCell has set its long-term growth plan looking beyond the present economic uncertainty and as far as fiscal year 2022. Based on its current revenue backlog and its demand expectations as the restrictions ease and performance improves, the company is not changing its growth expectations.
Looking to FY2022, the company expects revenues to grow at a double digit CAGR compared to the fiscal year ended October 31, 2019. The Generation portfolio is expected to grow 100% compared to 2019. FuelCell expects to deliver positive adjusted EBITDA by FY 2022.
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