FuelCell (FCEL) To Report Q4 Earnings: What's In Store?

FuelCell Energy Inc. (NASDAQ:FCEL) is scheduled to release fourth-quarter fiscal 2019 results on Jan 14, 2020. In the last reported quarter, the company delivered a negative earnings surprise of 84.4%.

Let’s see how things are shaping up for this alternate energy company prior to the earnings announcement.

Factors to Note

During the quarter, FuelCell Energy announced the conclusion of the engagement with Huron Consulting, which provide various services related to the company's restructuring and contingency planning initiatives. The initiatives will assist FuelCell to benefit from rightsizing of business, implementation of cost-cutting measures and repayment of debts.

During the quarter, the company received commitment and strategic investments from Orion Capital Partners and ExxonMobil (NYSE:XOM), which will help FuelCell in the execution of certain projects and to expand its carbonate fuel cell technology for the purpose of capturing carbon dioxide from industrial facilities.

FuelCell Energy’s Tulare Project started commercial operation in California during the fourth quarter. This 2.8-megawatt fuel cell project has a 20-year power purchase agreement to supply California Electric Grid. This project will have a positive impact on revenues of the company. The Zacks Consensus Estimate for the quarter is revenues of $9 million and a loss of 9 cents per share.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for FuelCell this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, FuelCell does not have the required combination, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: FuelCell currently has a Zacks Rank #3. The company’s favorable Zacks Rank, when combined with the 0.00% ESP, lowers the possibility of an earnings beat.

However, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.

Stocks With Favorable Combination

Let’s focus on a few stocks from the same sector that have the right combination of elements to post an earnings beat in the upcoming releases:

CNX Resources Corporation (NYSE:CNX) is slated to release fourth-quarter results on Jan 30. It has an Earnings ESP of +289.47% and a Zacks Rank #2.

Bloom Energy Corporation (NYSE:BE) is scheduled to release fourth-quarter results on Feb 4. It has an Earnings ESP of +300.00% and a Zacks Rank #3.

Devon Energy Corporation (NYSE:DVN) is set to release fourth-quarter results on Feb 18. It has an Earnings ESP of +3.85% and a Zacks Rank #3.

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