Still In The Red, FuelCell Energy Widens Its Margins

FuelCell Energy advanced a short distance in its march toward profitability during the first quarter of the year, the company said after financial markets closed Tuesday, reporting thinned losses in line with analyst expectations.

Sales were lower than the same period last year, the company said. But its margins improved substantially due to cost savings in its production and the quarter’s particular sales mix.

“The gross margin nearly doubled this quarter,” said Chip Bottone, FuelCell Energy’s chief executive.

The gross margin, or profit earned on the goods produced before other overhead costs, jumped to 9.6 percent from 4.9 percent.

The Danbury-based manufacturer of fuel cells had $41.7 million in sales in the three months ending Jan. 31, giving the company a gross profit of $4.0 million, compared with $2.2 million the prior year.

Minus out administrative expenses, research costs, interest and tax expenses, and FuelCell Energy ended the quarter with $4.9 million in the red, or a loss of 2 cents per share, compared to a loss of $11.4 million, or 6 cents per share, in the prior year.

The company’s fuel cells harvest hydrogen from natural gas, then convert that hydrogen into heat and electricity.

Manufactured in Torrington, the fuel cells can be as small as a mobile home and emit only trace amounts of pollutants. Separate from power generation, the fuel cells can be used to produce hydrogen as well as capture carbon emissions from gas and coal power plants.

FuelCell Energy’s sales books for new equipment fell over the last year to $109.0 million, while its backlogs for service revenue and advanced technologies contracts together grew to $228.0 million, the company said.

Shares of FuelCell Energy closed trading down slightly on Tuesday at $1.28 per share on the NASDAQ.