FuelCell Down 6.5% Before Earnings But Removes Asian Market Roadblock

FuelCell Down Before Earnings But Removes Roadblock To Asia Expansion - Carbon Herald
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FuelCell Energy (Nasdaq: FCEL) is seeing a 6.5% drop before its earnings for Q4 are announced tomorrow but investors still have something to cheer about – a settlement agreement with South Korean company POSCO has been reached.

FCEL is slated to release fourth-quarter fiscal 2021 results on Dec 29 before the market opens at 8am. In the last reported quarter, the company delivered a rare surprise on the upside.

This time the circumstances seem a bit more complicated. With FuelCell becoming one of the heavily traded stocks on the Nasdaq, analysts are taking a closer look at the fundamentals of the company before each announcement.

For this quarter, market analysts expect that the fiscal Q4 earnings could improve after the company reduced its long-term debt in first three quarters and has seen progress in the adoption of its fuel cell technnology.

FCEL earnings results for last four quarters. Source: Google Search

This quarter also saw an extension of an existing collaboration with ExxonMobil for carbon capture, but that does have a deadline of six months attached to it.

Relevant: FuelCell Energy And ExxonMobil Extend Carbon Capture Agreement

FuelCell deal with POSCO right before earnings

In what perhaps should have been a bullish signal, FuelCell announced today a settlement has been reached with POSCO Energy Co., Ltd. and its subsidiary, Korea Fuel Cell Co. The agreement provides the US company exclusive sales rights in Asia.

“This resolution unlocks a path forward and gives customers in South Korea and across Asia the ability to evaluate FuelCell Energy’s differentiated platforms against alternative offerings without concern and uncertainty surrounding the legal dispute between FuelCell Energy and POSCO,” said CEO Jason Few.

The focus of the agreement are the sales and servicing of the platforms and FuelCell will now be able to independently develop markets for its technologies in the Asian region without any hindrance or ambiguity for existing and potential clients.

Demand is expected from China, India, South Korea and Japan, as hydrogen adoption in the region gathers pace.

The Asian fuel cell market is projected to grow with 17% in the next five years according to research from Mordor Intelligence.

Both stationary and portable fuel cells are set to see more widespread adoption and FuelCell’s timing with this move seems great.

Read more: What Are The Hottest Top 5 Hydrogen Stocks?

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