Fuel cell manufacturer Bloom energy (NYSE:BE) rose 20.4% through Friday at 11:50 a.m. ET, which is kind of strange… because Bloom Energy reported its third-quarter earnings last night – and missed out big time.
Ahead of the report, analysts forecast that Bloom Energy would earn $0.08 per share on revenue of $382.2 million. In fact, Bloom’s third quarter revenue was only $330.4 million, and instead of turning a profit, Bloom lost money: $0.01 per share pro forma, and $0.06 per share, according to generally accepted accounting principles (GAAP ).
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Investors didn’t care. Coinciding with the earnings news, CEO KR Sridhar was able to announce a new partnership with South Korea’s SK Eternix to “build the world’s largest fuel cell energy system and make it operational in 2025.” Sridhar called the deal, with a capacity of 80 megawatts, “a testament to how Bloom Energy can power large AI data centers in the future.”
And there you have it, folks, the likely reason why Bloom stock is fluctuating today: More than just a hydrogen stock, Bloom has now also become an artificial intelligence (AI) stock.
And this wasn’t Bloom’s only good news. While revenue shrank 18.5% year over year, Bloom managed to reduce its cost of goods sold by 38%. As a result, Bloom’s gross profit margin, which was negative just a year ago, improved to a positive 23.8% in the third quarter of 2024.
Although the operating margin is still negative, it is much smaller than before, at only negative 2.9%. In the end, Bloom still lost $0.06 per share. However, this was a much better result than the $0.80 per share Bloom lost in Q3 2023. Analysts still expect Bloom to lose money this year, but hope earnings will turn positive in 2025.
I hope they’re right. With Bloom still not profitable and a lot of cash on hand at the moment, I can’t bring myself to recommend buying this stock just yet. That said, the improvement is undeniable. Bloom investors finally have good reason for optimism.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why Bloom Energy Stock Soared 20% After Earnings Originally Published by The Motley Fool
