Not great, but we're getting there. That was the take-home from
earnings post today.
The company, which manufactures power plants and fuel cells that produce clean energy, said today that it lost money in the second quarter. But the street cheered, thanks to some cost-cutting moves and some burgeoning customer news.
The Danbury, CT, company posted a net loss of $19.9 million, or 29 cents per share. Still, that's better than the year-over period, when losses settled at $25.8 million or 38 cents per share. And it just barely beat a 30-cent expected loss from analysts.
Though revenues dropped from $31.6 million at this time last year to $22.9 million this quarter, the company cut total costs and expenses by nearly 30%. FuelCell Energy said costs of product sales and revenues dropped, while the company also jettisoned $1 million in administrative expenses and another $900,000 in R&D.
The company's product cost-to-revenue ratio came in at 1.48-to-1, which is down from 1.50-to-1 a year ago.
In February, the company also cut its workforce by 6% and put a halt to employer contributions to 401(k)'s.
Product sales backlog also fell over 50% from the year-over period, with FuelCell Energy saying the credit crisis kept the company from closing on some sales in the U.S. at the end of the quarter.
Despite the revenue slump, the company is making the case that more demand may be on the horizon. FuelCell Energy also said today that POSCO Power ordered 30.8 MW in fuel cells and modules this month, representing $58 million for FuelCell. As part of the deal, POSCO Power, a leading independent power producer in South Korea, will also make a $25 million equity investment in FuelCell Energy, buying common stock priced at $3.59 a share.
Yesterday, FuelCell Energy also said it sold one of its power plants to Sonoma County in California. The energy from the plant will be used to supply electricity to a jailhouse and county office buildings. Financial terms of the deal were kept under wraps, though partial funding came from a $3 million grant from the state's Self-Generation Incentive Program. The program is administrated by Pacific Gas and Electric Company.
"Despite the financial crisis, we continue to see demand for our products. The POSCO Power 30.8 MW order, recent Connecticut Renewable Portfolio Standards award, activities in the California market and government initiatives for green energy and green jobs are positives for our business," CEO R. Daniel Brdar said in the release today. "Additionally, our cost out programs are meeting expectations and our new cost-reduced fuel cell power plants are on schedule for third quarter production."
Investors liked the news in the morning session. Shares of FuelCell Energy have hiked by 23% since yesterday, up 95 cents to $5.01, after the stock finished yesterday's regular session in the red.
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