What to watch when FuelCell (FCEL) reports Q1 2020 earnings

FuelCell Energy Inc. (NASDAQ: FCEL) is slated to report first quarter 2020 earnings results on Monday, March 16, before the market opens. Analysts expect the company to report a loss of $0.08 per share on revenue of $14.9 million.

FuelCell’s stock has gained 68% over the last three months but has fallen over 44% in the past one month alone. If the company reports better-than-expected results for the first quarter, the stock could see a pickup.

The company posted a decline in revenues last quarter due to its decision to focus more on utility scale Power Purchase Agreement opportunities over product sales. Sales are estimated to fall around 16% in the first quarter as well.  

Also read: FuelCell Q4 2019 Earnings Conference Call Transcript

FuelCell is likely to benefit from an increase in Generation and Advanced Technologies contract revenues. The company’s carbon capture joint development agreement with ExxonMobil (NYSE: XOM) could also prove beneficial in driving growth.

However, the company appears to have limited options when it comes to raising capital. Experts also believe the stock is subject to a high level of volatility. It also remains to be seen how the drop in oil prices will impact the company.

In the fourth quarter of 2019, FuelCell missed estimates on both revenue and earnings. Revenue dropped 38% to $11 million while net loss was wider-than-expected at $0.23 per share.

Last quarter, FuelCell also announced a comprehensive strategy to strengthen its business and maximize operational efficiencies. This is expected to enable the company to capture future growth opportunities by expanding its project backlog, and developing and commercializing new technologies with its partners.

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