Knobias Clip Report (08-28-2008) FCEL
Submitted By Knobias ClipReport
FCEL: Management Discusses Q3 Results and Opportunities for Growth
By Fain Hughes, fhughes@knobias.com
Share of FuelCell Energy, Inc. (FCEL) declined on Thursday after the Company reported financial results for its third fiscal quarter ended July 31, 2008. The Company reported a 106 percent increase in revenues for the third quarter of fiscal 2008 of $27.9 million, compared to $13.5 million in the same period a year ago. Net loss was $26.8 million, or $0.39 per basic and diluted loss per share, compared to a net loss of $16.2 million, or $0.24 per basic and diluted share, in the same period of the previous year.
R. Daniel Brdar, FuelCell Energy’s Chairman and CEO, commeted in a conference call, “Building on our first half of the year with our continuing cost reductions, record revenue, backlog, order pipeline and production ramp up, we are well positioned to close out the year in record fashion. As a result of this year’s cost reduction efforts, we expect to see positive gross margins on multi-megawatt power plants and fuel cell modules., which will be the majority of our production by late 2009. The market is moving to fuel cells and is increasingly adopting our products.”
He continued, “The growing worldwide market demand for high-efficiency and ultra-clean power generation is reflected in our backlog. We are currently increasing our production capacity to meet this demand. We have also implemented several initiatives to soon deliver another 20% reduction in megawatt class products. Our continued success in cost reduction and our increasing backlog of megawatt and multi-megawatt power plants and fuel cell modules.”
“South Korea is currently our largest market. We expect this to grow because of goverment mandates and initiatives there. We are also awaiting on our U.S. Congress to pass the extension of the Federal Investment Tax Credit, giving us a 6-8 year extension. The consensus seems to be that the bill will pass, so we remain very optimistic. In the meantime, we continue to line up opportunities that we can execute quickly after the ITC extension is complete.”
Mr. Brdar concluded, “We are executing on a solid backlog, ramping the business, driving down product costs and introducing even higher efficiency products.”
Joseph G. Mahler, CFO of FuelCell Energy, added, “Margins continue to improve. Product cost reductions are on target with the focus primarily on megawatt and multi-megawatt products. We are confident that we will continue to hit our product cost targets. Product revenue backlog, including long term service agreements, more than doubled the prior year Q3. We have made significant year-over-year progress in increasing production, reducing product costs and expanding our markets.”
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