FuelCell Energy Inc (NASDAQ:FCEL): Advantage Over Alternative Energy

by Tom Carlson | Tuesday, Apr 8, 2014 | 1424 views

Boston, MA, 04/08/2014 (usastockreports) – Fuel cell power generation is another source of alternative energy and is considered as better technology options compared to conventional methods. It is well recognized in major countries as clean energy solutions that could be planted at populated areas. The stationary fuel cell sector expects continuous growth across all areas including small scale grid for residential use to large scale installation for power stations due to increasing applications of fuel cell technology. FuelCell Energy Inc (NASDAQ:FCEL) offers a wide range of products and services for stationary fuel cell power plants. The Company also offers both 1.4 MW and 2.8MW power generation solution to support high power fuel cell parks.

Top line growth

In recent quarter (1Q2014), FCEL’s revenues were increased by 22% year-over-year to $44.4 million, above average estimates, according to Thomson Reuters. The increase was due to high product sales resulted from an increase in power plant revenue, services and sales of components and fuel cell kit.

FuelCell Energy Inc (NASDAQ:FCEL) has underperformed with negative earnings; however, it improved compared to prior year period due to top line growth. Highly diversified portfolio and cost reductions improved its gross margin to 4.9%. The revenue mix is well spread over products, services and advanced technology with backlog orders of $326.8 million as of January 31, 2014. FCEL generated $5.1 million cash from its operation during the same period.

FCEL’s strength

FCEL improves its financial strength compared to prior year period – shareholder’s equity of $27.3 million and cash balance of $104.6 million as of January 31, 2014. The Company’s price to sales (ttm) ratio in last 12-months was 3.13.

Conclusion

FuelCell Energy Inc (NASDAQ:FCEL) expects profitability with growing adoption of fuel cell technology and the Company’s competitive advantage over stationary fuel cells anticipates an increase in backlog orders. Strong partnership across North America, Europe and Asia will further support market demand and margin improvement.

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