FuelCell Energy (ticker: FCEL) reported a narrower loss than expected in the fiscal third quarter. However, the company experienced a decline in revenue compared to the prior year, primarily driven by a decrease in module sales.
In Q3, FuelCell reported a loss of 6 cents per share, surpassing Wall Street’s expectations. The company generated $25.5 million in revenue during the quarter, representing a 41% decline compared to the same period last year. Analysts surveyed by FactSet had anticipated a loss of 8 cents per share on revenue of $27.7 million.
To provide some context, in the corresponding quarter of the previous year, FuelCell reported a loss of 8 cents per share and generated $43.1 million in revenue.
Factors Influencing Revenue Decline
CEO Jason Few attributed the decline in revenue to lower product revenues due to the absence of module sales when compared to the previous year’s quarter. Specifically, there was a lack of sales of replacement modules to Korea Fuel Cell.
Additionally, the company’s booking backlog, which represents definitive agreements between FuelCell and its customers, declined by approximately 17% compared to the same quarter last year. This decrease was primarily due to the decision to not proceed with certain generation projects in the fourth quarter of fiscal 2022.
Shares of FuelCell experienced a 1.4% increase in premarket trading on Monday, reaching $1.46. However, since the beginning of the year, the stock has declined by 48%.
FuelCell’s Q3 results highlight both positive and negative aspects of its financial performance. While the narrower loss is encouraging, the drop in revenue raises concerns. The company will need to focus on addressing the factors contributing to this decline and consider strategies to increase sales moving forward.