Cowen Offers Initial Thoughts on FuelCell (FCEL) Following Q3 Report
Cowen and Company comments on FuelCell Energy (Nasdaq: FCEL) following Q3 results. The firm has FuelCell with an Outperform rating and $3 price target.
Analyst Jeffrey Osborne commented, FuelCell Energy reported revenue of $43.2 million, below our and street estimates of $56.4 and $53.6 million, respectively. Gross margin came in at a record 9.2%, just above our estimated 9.1%, resulting from lower costs associated with higher constant production volume at 70 MWs annually. EPS resulted in ($0.03) per share, in line with our and street estimates.
Osborne continued, We believe the top line miss was due to project timing, but look for more color on the call. Our positive stance on the stock is predicated more on likely wins with NRG and LIPA over the coming months rather than short term trends. We look for updates on the 600 MW of pipeline the company has discussed in the past as no "new" major wins were announced in conjunction with earnings.
Product sales levels proved disappointing, at $43.2 million, a 20% reduction from the same quarter in 2013. Short-term cash and cash equivalent, however, totaled $113 million, approximately 16% of market cap ... total backlog marginally increased to $350.2 million from $342.8 million as of the end of last quarter, resulting from a sequential increase in utility service contracts.
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FuelCell Energy closed at $2.67 yesterday.