Oil and gas companies have been shooting the lights out this earnings season, with the energy sector recording the highest growth of any of the U.S.' 11 sectors. The sector has so far reported Q2 revenue growth of 112.8% Y/Y, more than three times the growth clip by the second-placed Materials sector. Big Oil has been particularly impressive, with ExxonMobil (NYSE:XOM), Chevron (NYSE:CVX), Shell (NYSE:RDS.A) and TotalEnergies (NYSE:TTE) all swinging to large profits after a dismal showing a year ago.
Unfortunately, the same cannot be said about Big Oil's green energy peers.
Top solar names First Solar (NASDAQ:FSLR) and Enphase Energy Inc. (NASDAQ:ENPH) have easily topped Wall Street's expectations; however, the latest spate of green earnings has been a mixed bag.
This comes after President Biden came out with an executive order on Thursday aimed at making half of all new vehicles sold in 2030 electric (battery-electric, fuel cell, and plug-in hybrid vehicles). The move is the latest in Biden's plan to fight climate change, in this case by targeting emissions from cars and trucks.
Surprisingly, the three leading Detroit automakers General Motors (NYSE:GM), Ford (NYSE:F), and Chrysler parent Stellantis N.V. (NYSE:STLA) have issued a joint statement supporting Biden's ambitious plan. The three have announced their shared aspiration to achieve sales of 40-50% of annual U.S. volumes of electric vehicles by 2030.
Here is the latest set of earnings in the green energy sector.
Last week, electric vehicles and mobility solutions company Fisker, Inc.(NYSE:FSR) delivered Q2 2021 results.
Fisker reported Q2 GAAP EPS of -$0.16 with cash and cash equivalents of $962 million as of June 30, 2021, as well as zero debt. Net cash used in operating activities totaled $28.1 million during the quarter, and cash paid for capital expenditures totaled $0.3 million.
Fisker remains a speculative play since it won't start production of EV SUVs until 2023 and probably won't start making serious cash until late 2021 on advance orders.
Fisker announced that the development of the Fisker Ocean SUV remains on track for expected November 17, 2022 start-of-production and full ramp up production volume reaching over 5,000 assembled units per month during 2023. The battery-electric SUV will start at $37,499, promising a range of 300 miles, in addition to features like a solar roof.
While Fisker touted its unique asset-light strategy that allows the company to work on multiple platforms and vehicles concurrently, the market appears unimpressed, with FSR stock down 10% over the last five trading sessions.
Perhaps investors feel that Fisker has not been moving fast enough and will come into a market rife with competition, especially now that the ICE giants have doubled down. Though non-binding, the 50% target is likely to attract billions of dollars in EV investments from both the private and public sectors over the next decade. Biden has already called for $174 billion in government spending to boost EVs, including $100 billion in consumer incentives. A bipartisan Senate infrastructure bill includes $7.5 billion for EV charging stations though it has remained mute as far as new consumer incentives go.
Consulting firm AlixPartners says investments in EVs could total $330 billion by 2025, with EVs likely to reach 24% of total sales by 2030.
Hydrogen fuel cell maker Plug Power (NASDAQ:PLUG) has reported mixed results but still managed to impress after reporting huge billing growth. PlugPower has reported Q2 GAAP EPS of -$0.18, missing the Wall Street consensus by $0.11, but revenue of $124.56M (+83.0% Y/Y) beats by $13.35M.
PlugPower says it shipped 3,666 GenDrive units vs. 2,683 GenDrive units in the year-ago quarter.
Gross billings were $126.3M last quarter compared to $72.4M a year ago.
President and CEO Andrew Marsh says that growth in the electrolyzer business is up over 400% Y/Y in 2021 and is expected to continue recording robust growth through 2024. The strong growth encouraged the company to raise its full-year gross bookings guidance to $500M. For FY 2022, Plug has set a target for $750M in gross bookings.
PLUG stock has surged 11% in early trading on Monday.
Last month, Citigroup initiated coverage on PLUG with a Buy rating and a $35 price target saying the nascent hydrogen economy is "at the cusp of a breakout and Plug leads the way."
Hydrogen stocks have badly lagged in 2021 after enjoying a breakout season in 2020 mainly on valuation concerns. The Defiance Next Gen H2 ETF (NYSEARCA:HYDRO) is down nearly 30% since its April launch.
#3. Ballard Power Systems Inc.
Ballard Power Systems (NASDAQ:BLDP) is another hydrogen name that has reported mixed second-quarter results.
Ballard Power reported Q2 GAAP EPS of -$0.07, missing the Wall Street estimate by $0.02 while revenue of $25M (-3.1% Y/Y) beats by $3.82M. Adjusted EBITDA clocked in at -$19.7 million, compared to -$8.0 million a year ago, primarily due to margin compression and rising cash operating costs. The company reported that Q2 2021 gross margin fell 600 basis points to 15%, driven primarily by the decrease in total revenues, combined with a shift to lower overall product margin and service revenue mix.
BLDP has been deeply out of favor this year after a series of earnings misses. However, the company is still regarded as one of the top hydrogen fuel cell brands, and its lofty target of 46% annual sales growth through 2030 makes it worth watching.
By Alex Kimani for Oilprice.com
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