FuelCell Energy (FCEL) is slated to report earnings this week, with a conference call scheduled for 10 a.m. ET on June 6. Aside from the upcoming report itself that will key on numbers for the past quarter, investors will be looking for guidance indicating the company may be in line to achieve manufacturing volume of 80 megawatts annually, the point at which the company noted expectations of profitability could become a reality.
Shares raced to the $1.40 mark last week after reports from both Bloomberg and Forbes highlighted FuelCell's potential to pounce on low natural gas prices to expand its business both domestically and globally. It is precisely the company's global connection with Korean partner Posco that has sparked positive coverage from both Forbes and Bloomberg over the past weeks. Forbes argued that the relationship has allowed FuelCell to solidify its pipeline and production expectations with enough volume to enable the company to achieve profitability at a manufacturing volume of 80 megawatts annually, approximately 30% higher than the current levels.
Bloomberg also chimed in, citing the low prices of natural gas as a key factor in FuelCell's near-term growth potential. These predictions may be well within reach as progress and the expansion of existing agreements materializes in both Asia and Europe.
The Posco collaboration, which most recently was worth a $30 million cash infusion to FuelCell, was recently accelerated to meet growing demand in the region. In terms of European expansion, FCEL announced the acquisition of key assets by its German subsidiary last month, along with the creation of a European joint venture that will improve the company's ability to leverage its technology and fuel growth on the European continent.
Those news items were followed-up with a release by FuelCell last announcing that existing customers have extended their service agreements, helping to solidify the company's mid- to long-term revenue stream. The news developments have been encouraging, and with natural gas prices further enabling FuelCell to take advantage of a booming market, the "perfect storm" may be building to provide the company with the necessary catalysts to sustain any potential gains.
Keep a keen eye on the report this week as it could provide a turning point.
Disclosure: I am long FCEL.