FuelCell Surges as Korean Steelmaker Boosts Stake: Boston Mover
FuelCell Energy Inc., (FCEL) a U.S. manufacturer of fuel-cell power plants, jumped the most in more than two weeks after the world’s third-largest steelmaker agreed to increase its stake and placed the company’s biggest order.
FuelCell climbed 7.3 percent to $1.61 a share at the close in New York, the most since Feb. 22. The shares have gained 85 percent this year.
South Korea’s Posco will pay $30 million for 20 million shares of FuelCell and agreed to buy 120 megawatts of power plants, Danbury, Connecticut-based FuelCell said today in a statement. FuelCell will also accelerate deliveries on Posco’s previous 70-megawatt order.
“It provides a consistent level of production for many years,” FuelCell’s Chief Executive Officer Chip Bottone said today on a conference call with analysts and investors. “This certainty of demand facilitates manufacturing efficiencies.”
The companies expect to complete the share purchase in April, giving Posco (005490) a 22 percent stake in FuelCell. Posco currently owns 10.8 million shares and is its largest holder. All of the systems will be produced at FuelCell’s factory in Torrington, Connecticut.
For its first fiscal quarter ending Jan. 31, FuelCell today reported a loss of $6.7 million, or 5 cents a share, narrower than a loss of $11.7 million, or 10 cents, a year earlier. Sales climbed 12 percent to $31.3 million.
FuelCell, which hasn’t reported an annual profit since 1997, has lost more than $718 million million over the past decade, according to data compiled by Bloomberg.
FuelCell’s systems produce electricity from natural gas or biogas, methane produced through wastewater treatment, food processing and other renewable sources.
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