Fuel-Tech Earnings: Here’s Why Investors are Ambivalent Now

Fuel-Tech, Inc. (NASDAQ:FTEK) had a loss and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.

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Fuel-Tech, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased to $0.0 in the quarter versus EPS of $0.06 in the year-earlier quarter.

Revenue: Decreased 10.83% to $22.48 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Fuel-Tech, Inc. reported adjusted EPS loss of $0 per share. By that measure, the company missed the mean analyst estimate of $0.03. It missed the average revenue estimate of $27.25 million.

Quoting Management: Douglas G. Bailey, Chairman, President, and Chief Executive Officer, commented, “Current year results at our Air Pollution Control (NYSE:APC) segment reflect a higher rate of conversion into revenues of the 2011 backlog in the first quarter of 2012 compared to the first quarter of 2013. This was expected, as the 2011 backlog was acquired during a period of accelerated regulatory-driven domestic buying that did not continue into 2012. However, we announced record 2012 APC bookings of $72.8 million, the majority of which were derived from international markets. During the first quarter of 2013 we announced contract awards with a value of approximately $7.6 million and, subsequent to quarter end, we announced additional APC orders valued at $4.3 million. This combination of new orders and continuing backlog conversion should allow us to generate increased revenue as the year progresses.”

Key Stats (on next page)…

Revenue decreased 9.76% from $24.91 million in the previous quarter. EPS decreased to $0.0 in the quarter versus EPS of $0.03 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.02 and has not changed. For the current year, the average estimate has moved down from a profit of $0.17 to a profit of $0.14 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)