FuelCell Energy ramping up production
During a midday conference call, executives of FuelCell Energy, Inc. (Nasdaq: FCEL), a maker of fuel cell power plants for electric power generation, said the company is increasing production to 25 megawatts per year from 11 megawatts, in response to orders and anticipated business in California and Asia.
The boost in production should be completed by the end of calendar 2007, CEO Daniel Brdar said. To complete the production increase, FuelCell hired a third shift in its Torrington, Conn., manufacturing plant. The production ramp-up could increase further depending on orders in Connecticut and the near-term order rate for Asia and California, he said.
POSCO (NYSE: PKX), FuelCell’s South Korean alliance partner, is making “important progress in penetrating the market for clean energy,” Brdar said. Fuel cells are essential to meet South Korea’s clean energy targets, he said.
Currently, 25 states now have renewable power standards laws, up from 21 states a year earlier, Brdar said. He compared this growth with the solar industry, which he said was aided greatly by government support.
Before the start of trading, FuelCell announced that Ford Motor Co. (NYSE: F) placed a fuel cell order for its Oakville, Ontario, facility. In a press release, Ford said the order will “reduce paint solvent emanating from automotive painting operations by turning fumes from those compounds into 300 kilowatts of green electricity.”
After Wednesday’s close, FuelCell reported third-quarter revenue of $13.5 million, up from $8.7 million in the year-ago period, but slightly below Wall Street expectations of $13.9 million. The power plant manufacturer’s quarterly net loss was $16.2 million, or $0.24 a share, compared with a loss of $19.8 million, or $0.37 a share, during the same three months of 2006. Analysts expected a loss of $0.34 per share. For the three months ended July 31, FuelCell’s product backlog more than doubled to $49.6 million, compared with $20 million a year earlier.
FuelCell’s third-quarter net cash use was $11.2 million, down from $17 million in the equivalent period of 2006. The company said in a release that increased customer deposits and deferred revenue contributed to cash use results. The firm’s research and development backlog totaled $22.1 million in the quarter, up from $9.8 million in the year-ago quarter.
“This was a solid quarter and we are in solid financial condition as we prepare for growth,” CFO Joe Mahler said.
In today’s trading, shares of the small-cap are up 10.5%, or $0.86, at $9.05. Over the last 52 weeks, shares have ranged from $5.84 to $9.90.
