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FuelCell Energy Management Expects Break-Even at 90 Megawatts

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Dec. 18 2015, Updated 2:06 p.m. ET

Gross profit

FuelCell Energy’s (FCEL) gross profit totaled $3.1 million in fiscal 4Q15, while it was $6 million in fiscal 4Q14. Its gross profit margin fell from 10.9% in 4Q14 to 6.1% in 4Q15.

FCEL is currently operating with an annual production capacity of 100 megawatts, and the company is selling 70 megawatts per year. According to chief executive officer Chip Bottone, the company will be profitable when it exceeds 90 megawatts of sales per year.

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Operating expenses

The company’s operating expenses for the current period totaled $11 million, while for the same quarter last year it was $10.9 million. It should be noted that administrative and general expenses rose while spending on research and development fell in fiscal 4Q15, compared to last year’s quarter.

FCEL’s depreciation expense was $1.1 million in fiscal 4Q15. FuelCell Energy also continued to lose on a per-dollar basis during the quarter. Its operating margins fell further in the current three-month period due to higher operational costs and low volumes. Its operating margins dwindled from -9.1% in fiscal 4Q14 to -15.2% in fiscal 4Q15. Its adjusted earnings before interest, tax, depreciation, and amortization in fiscal 4Q15 stood at -$6.7 million.

Net loss

The company’s net loss can primarily be attributed to lower revenues from its business segments and increased spending in the quarter. Its net loss totaled $9.7 million, or $0.38 per share, in fiscal 4Q15, compared to $5.5 million, or $0.24 per share, in fiscal 4Q14.

For the year, FuelCell Energy reported that its net loss narrowed to $29.4 million, or $1.33 per share. In 3Q15, alternative energy (PBW) (ICLN) player Plug Power (PLUG) reported losses, while EnerSys (ENS) reported $26 million in net earnings.

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