FuelCell Energy Year-over-year sales nearly double

Shares of Danbury-based FuelCell Energy surged as much as 11 percent on Thursday, a day after the company posted a narrower loss for this year's first quarter, beating analysts' estimates.

The developer of fuel cell power plants for electric power generation reported a net loss of $11.7 million, or 10 cents per share, compared with a loss of $15.4 million, or 18 cents per share, for the year-ago period. Revenue almost doubled to $28.1 million from $14.6 million.

Analyst consensus for FuelCell Energy was for a net loss of 12 cents per share, according to Norwalk-based FactSet Research Systems Inc.

The company's stock is on the upswing because the firm performed better than expected on earnings per share and sales, said Walter Nasdeo, an analyst with Ardour Capital Investments LLC rates the shares "accumulate." Nasdeo expected the company to report a loss of 13 cents per share on $22 million in revenue.

The promotion of Arthur "Chip" Bottone, FuelCell Energy's former senior vice president and chief commercial officer, to president and chief executive officer after Dan Brdar stepped down from the top post in February sheds further positive light on the company, Nasdeo said.

"They've shifted over to Chip, whose background is sales," he said, adding that Brdar was more instrumental in developing the company's operations since joining in 2000. "Assuming he (Bottone) is capable of what he can do, that's pretty exciting."

FuelCell's shares gained for a third day, closing up 7 cents, or almost 4 percent, to $1.86, while Connecticut's Hearst/Bloomberg Southwest Index declined 2.80 to 145.10.

Whether FuelCell Energy, which has a manufacturing plant in Torrington, can continue a strong sales trend remains to be seen because the company, whose stock is prone to volatility, has historically performed at a loss, said Matthew Crews, an analyst with Noble Financial Capital Markets who rates the shares a "buy."

"The quarter represented progress toward that goal," said Crews, who estimated a loss of 10 cents per share on $22 million in revenues. "They've got the product, now they just need to sell more of it."

To date, FuelCell Energy has received 70 megawatts of fuel cell orders from Posco Power in South Korea, 43.5 megawatts from Connecticut businesses and 4.2 megawatts of orders from California universities. The company, which recently received its first order in the United Kingdom for a direct fuel cell power plant in London, saw its order backlog increase to $160 million in 2010 from $84 million in 2009.

FuelCell Energy's focus is on revenue growth, customer satisfaction and operational excellence as it expands its markets, Bottone said.

"Our strategy is to expand in key geographic markets and areas while continuing to reduce product costs," Bottone said during an earnings call held Thursday morning. "To accelerate growth and achieve profitable operations as quickly as possible, we have matriculated a compelling mission and vision to which our talented management team and associates are fully committed."

Source: Michael C. Juliano, NewsTimes.com