Why Clean Energy Fuels (CLNE) Is Down Today

NEW YORK (TheStreet) -- Clean Energy Fuels (CLNE) was falling 12.6% to $8.47 on Friday after missing analysts' estimates for earnings and revenue in the fourth quarter.

The company posted a loss of 25 cents a share for the fourth quarter, wider than analysts' estimates of a loss of 20 cents a share. Revenue fell 14.2% from the year-ago period to $85 million, missing analysts' estimates of $92.6 million.

In a press release announcing the quarterly results, Clean Energy President and CEO Andrew J. Littlefair said that 2013 "will go down as the year the heavy-duty trucking industry began its transition to natural gas in a meaningful way."

"Over the last year, we made significant strides in building out our fueling infrastructure, establishing relationships with new customers and expanding our relationships with existing customers," Littlefair said. "We believe this will enable Clean Energy to capture a substantial share of the new and large trucking market, as well as extending our existing market position in the more established natural gas markets of refuse, transit and airports."

Must read: CLNE Stock Crowded With Sellers

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TheStreet Ratings team rates CLEAN ENERGY FUELS CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about its recommendation:

"We rate CLEAN ENERGY FUELS CORP (CLNE) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, unimpressive growth in net income, generally high debt management risk and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, CLNE has underperformed the S&P 500 Index, declining 22.20% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 15.4% when compared to the same quarter one year ago, dropping from -$16.32 million to -$18.84 million.
  • The debt-to-equity ratio of 1.14 is relatively high when compared with the industry average, suggesting a need for better debt level management. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 4.17, which shows the ability to cover short-term cash needs.
  • CLEAN ENERGY FUELS CORP's earnings per share declined by 5.3% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CLEAN ENERGY FUELS CORP reported poor results of -$1.15 versus -$0.68 in the prior year. This year, the market expects an improvement in earnings (-$0.39 versus -$1.15).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CLEAN ENERGY FUELS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: CLNE Ratings Report

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