Hydrogen fuel cell stocks Plug Power and Ballard Power Systems spiked Wednesday after both companies missed second quarter earnings predictions, reporting losses greater than expected. This comes after the U.S. Senate approved a sweeping spending bill over the weekend that would direct billions of dollars toward clean energy projects.
PLUG increased 16% Wednesday morning while BLDP gained nearly 4%. Both stocks booked losses Tuesday.
Hydrogen Fuel Cell Stocks: Ballard Power Systems Earnings
Estimates: Wall Street forecasted a net loss of 12 cents per share and $24.6 million in revenue in the second quarter.
Results: Ballard Power Systems reported Wednesday $20.9 million in total sales, a 16% decrease year-over-year. The company saw a loss of 19 cents per share in the quarter. Ballard had a loss of 7 cents per share in Q2 2021.
Outlook: Citing the "challenging macro-economic" environment, BLDP said it has decreased its planned investments in 2022. The company revised its total operating expenses to $130 million-$150 million, down from $140 million-$150 million. Ballard also dropped its capital spending guidance from the previous $40 million-$60 million to $30 million-$50 million.
The Canada-based Ballard Power Systems focuses on developing fuel cells for commercial vehicles. This includes buses, trucks, trains, ships and boats as well as stationary power units. Like Plug Power, Ballard is betting big that hydrogen will be a key part of the global energy transition away from fossil fuels.
"Notwithstanding the current macro-economic context, we remain confident on the long-term opportunities for hydrogen and fuel cells," CEO Randy MacEwen said in a statement.
MacEwen added the company is encouraged by the European bus market, with public transport operators in Germany and The United Kingdom announcing plans to deploy more hydrogen fuel cell bus fleets in the near future.
BLDP stock gained 6% to 8.92 during Wednesday's market trading. Shares had dropped 5.3% Tuesday.
Ballard missed on estimates in Q1 with a loss of 14 cents per share and sales of $21 million in. Analysts predict Ballard will report a loss of 52 cents per share in 2022 on $110.3 million in revenue.
Ballard has a Composite Rating of 30. It has a 27 Relative Strength Rating and a EPS Rating of 2. While both fuel cell stocks are sitting on strong three-week advances, Ballard remains down 78% from a February, 2021 high.
The Climate Bill
The Senate passed the proposal, titled the Inflation Reduction Act, along a party-line vote on Sunday. The legislation includes around $370 billion in funding and programs to accelerate the buildout of green energy infrastructure across the country. If signed into law, the bill aims to boost the U.S. solar industry, electric vehicle manufacturers and other clean energy sectors.
Among the legislation's provisions is more than $9 billion for the federal procurement of American-made clean technology. It also includes $3 billion for the U.S. Postal Service to purchase zero-emission vehicles. The bill also figures in tax credits and grants of unspecified amounts for states and municipalities employing clean fuels and commercial EVs in public transport.
Another key part of the package includes tax credits for clean hydrogen and clean energy manufacturing, with specific amounts for photovoltaic cells and wind turbine blades. There is $60 billion for clean onshore energy production and around $30 billion in production tax credits to accelerate U.S. manufacturing of solar panels, wind turbines and batteries.
There is roughly $30 billion in targeted grants and loan programs for states and electric utilities to accelerate the transition to clean electricity. The package also includes up to $20 billion in loans to build new EV factories and $2 billion in grants to overhaul existing auto plants to make electric vehicles.
Hydrogen Fuel Cell Stocks: PLUG Earnings
Estimates: Analysts predicted Plug Power would report a net loss of 20 cents per share and $161 million in revenue in Q2.
Earnings: Plug Power lost 30 cents per share and $151.3 million in revenue, a 21% increase year-over-year. The company also reaffirmed its full fiscal year sales forecast of $900 million-$925 million on Tuesday.
PLUG stock was up 16.5% to 28.74 Wednesday. Shares fell 3.7% to 24.67 in Tuesday's market trading. The stock retook support at its 40-week moving average last week, on the heels of a powerful three-week advance on news of the green power legislation. It is well below recent highs.
Plug Power stock went public in 2002. Based in Latham, N.Y., Plug Power supplies hydrogen fuel cells mainly for forklifts in large warehouses. Its fuel cells replace conventional batteries in equipment and vehicles powered by electricity. Plug Power clients include retail giants Amazon, Walmart, Nike and Home Depot.
The company is looking to produce more than half of its hydrogen energy from entirely renewable sources by 2024. It also aims to branch out from forklifts to heavy-duty vehicles to serve ports in the U.S. and Europe, as well as stationary fuel cells to power data centers and distribution hubs.
In the first quarter, PLUG reported a loss of 27 cents a share, worse than expectations for a 16-cent loss. Revenue rose 96% to $140.8 million, but it also missed forecasts for $144.8 million.
PLUG stock has a 72 Composite Rating out of 99. It has a 89 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share price movement with a 1 to 99 score. The EPS rating is 19.
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