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Summary

  • Clean Energy reported Q2 '14 earnings.
  • Based on these results, the stock is still a sell.
  • Previous research anticipated that results would make no meaningful improvements over prior years.

For Q2 '14, Clean Energy Fuels (NASDAQ:CLNE) performed well against expectations, but the provider of natural gas fuels remains far from generating the growth and profits originally thought possible. For the quarter, the company reported that gallons delivered grew 23% to reach 64.8 million gallons. Though a solid growth rate, the company still lost $0.28 on revenue of $98.1 million. Both numbers exceeded analyst estimates, but again show no fundamental improvements over prior years.

As usual, the management team announced new customers, vehicles added, and fueling stations under construction, but it still fails to provide real financial metrics. Despite owning fueling stations, Clean Energy provides no comp sales data or even trucks fueled per station. What it does mask is that while the company adds new stations and vehicles, it doesn't appear to ever add more vehicles fueled per station. The company suggested that it needs to add 15 million more gallons per quarter to reach EBITDA positive after generating a better than forecast loss of $4.7 million. Note though that interest expenses continue to soar with a jump to $10.1 million in the last quarter. To become profitable, Clean Energy needs to jump over this ever increasing hurdle.

The prior research forecast that Clean Energy would continue focusing on the stations opened and under construction like in the release prior to the Q2 '14 report and a lot less on profits. The company continues to only make margins of somewhere close to $0.30 a gallon. Investors need to focus on the hardcore metrics of fueling stations and a lot less on the modern fueling concept presented by the company. The financial metrics continue to make limited progress making the stock one to avoid.

Source: Update: Clean Energy Fuels Q2 '14 Earnings

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