What happened
Last week was an important week for thehydrogen fuel cellindustry, withBallard Power Systems(NASDAQ:BLDP),Bloom Energy(NYSE:BE), andPlug Power(NASDAQ:PLUG)reporting earnings.FuelCell Energy(NASDAQ:FCEL)was the odd man out. It reports earnings only next month -- but even FuelCell Energy had some news to report today.
On Friday, investors rendered their verdict on the week, and it was generally positive, with every fuel cell stock but Plug closing the day higher -- and today looks even better.
Here's how the fuel cell stocks are faring as of 11:35 a.m. EDT Monday.
- Ballard Power is up 4.9%.
- Bloom Energy is up 5.5%.
- Plug Power is up a remarkable 8.5%.
- FuelCell Energy is doing best of all, up 11%.
So what
After gaining only 2.2% Friday, FuelCell is rocketing this morning on news that it has secured $15 million in financing from East West Bank to fund its production of a 7.4 megawatt fuel cell project for the U.S. Navy Submarine Base in Groton, Connecticut. It believes it can secure debt financing to complete the project later this year. Commercial operation of the project could begin as early as next month, and FuelCell calls this a "milestone" project for the company -- one that will secure a 20-year-long revenue stream as FuelCell provides electricity from the project to the Naval base.
Now what
Now let's quickly review the news for the other three fuel cell firms -- the ones that reported earnings last week, and see whytheyare performing so well, as well.
According to published analyst estimates collated byTheFly.com, all three fuel cell firms (aside from FuelCell) missed earnings last week, with Bloom reporting a $0.23 per share loss on Wednesday, followed by Plug losing $0.18 per share on Thursday, and finally Ballard losing $0.07 per share on Friday.
That doesn't sound so great, but on the bright side, Ballard and Plug, at least, reported better-than-expected revenue for their respective fiscal second quarters. And Bloom gave new guidance for the balance of fiscal 2021 which -- taken at the midpoint -- sees revenue coming in at about $975 million, or slightly ahead of expectations.
It's this revenue growth investors seem to be focusing on today, on the assumption that at some point in the future, this revenue will turn into profits. Based on last week's abysmal profit performance, however, and based on the industry's history -- specifically, the fact that according toS&P Global Market Intelligence, out of these four companies, only Ballard has ever earned a single full-year profit in the past 20 years -- I'm not sure I share investors' optimism aboutthese stocks.