Energy & Mining

Clean Energy Fuels Corp (NASDAQ:CLNE) Q2 Earnings Disappoint

Clean Energy Fuels Corp (NASDAQ:CLNE)

Clean Energy Fuels Corp (NASDAQ:CLNE)

Clean Energy Fuels Corp (NASDAQ:CLNE) has dropped 20%, in eight days, from $3.00 to less than $2.40 on an inter-day basis. The market sold off the clean energy stock after it reported Q2 earnings in which revenue fell over 25% from the same quarter a year ago. Volumes were heavy during the period and, on Friday, the number of CLNE shares traded was more than double the 30-day, daily average.

Clean Energy Fuels Corp (NASDAQ:CLNE)
One month daily candlebar chart for CLNE

Clean Energy Fuels Corp (NASDAQ:CLNE) provides natural gas fuel for use in North America’s transportation industry. The company builds and operates clean natural gas (CNG) and liquid natural gas (LNG) vehicle fueling stations and also manufactures CNG and LNG equipment and technologies. Clean Energy is the leading provider of CNG and LNG vehicle fuel in the United States. Clean Energy also sells Redeem™ RNG fuel and claims that it is the cleanest transportation fuel commercially available, reducing greenhouse gas emissions by up to 70%.

The Newport Beach, CA-based company delivered 88.4 million gallons in Q2 2017, a 6.6% increase from 82.9 million gallons delivered in the same period in 2016. Q2 2017 revenue was $81.0 million, a 25.0% decrease from the reported Q2 2016 revenues of $108.0 million. Clean Energy claimed the decrease was primarily due to a lower effective price per gallon due to the company’s sale of certain assets related to the upstream production portion of its RNG business. Like the rest of the industry, the company’s revenue was hit by the expiration of the U.S. federal excise tax credits for alternative fuels (“VETC”) on December 31, 2016.

Andrew J. Littlefair, President and Chief Executive Officer of Clean Energy Fuels Corp (NASDAQ:CLNE), stated: “Continued volume growth and positive adjusted EBITDA made for a favorable second quarter with what we believe is positive momentum moving forward. Particularly of note were several significant customer wins with our Redeem™ renewable natural gas, demonstrating how the transportation industry continues to embrace the cleanest fuel available.”

In 2012, Clean Energy Fuels Corp (NASDAQ:CLNE) was trading over $24. Since then CLNE shares have been on a continual slide and have a 52-week low of $2.18. YTD CLNE shares are down over 15%, and are down over 13% for the year. CLNE shareholders have experienced losses every year since 2012 when the company posted a loss of (-$1.16), however the smallest loss was last year at (-$0.10). Sales have been lackluster. In 2015 the company reported $384.3 million but that figure increased to just $402.7 in 2016.

Two investment firms follow Clean Energy Fuels Corp (NASDAQ:CLNE). One rates CLNE shares as a “Strong Buy”, while the other rates the shares as a “Hold”.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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