|Sierra Nevada Brewery, Chico|
I think it would be premature. U.S. investors have a tendency to make decisions from headlines, which often accentuate the negative for attention. To reach the two newspaper articles one might assume fuel cells are a technology that is not commercially viable. Indeed, Ballard Power Systems (BLDP: Nasdaq) may be on the cusp of profitability as the consensus estimates published by Thomson-Reuters suggest an expectation of profit in the December 2012 quarter. Ballard produces proton exchange membrane (PEM) fuel cells for both stationery and vehicle power solutions and is consistently, even if slowly, winning new customers.
In April 2012 South Korea’s POSCO Energy took an equity position in FuelCell (20.0 million shares at $1.50 per share). POSCO’s previous order for 70 megawatts of fuel cells was accelerated and another 120 megawatt order tacked on the end. FuelCell expects a base of production near 40 megawatts per year from the POSCO deal. POSCO Energy has also licensed FuelCell’s technology and will manufacture fuel cell components in Korea at its own facility. I believe the POSCO relationship is a major breakthrough for FuelCell and is clearly a key to securing those elusive profits.