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Clean Energy Fuels Can Deliver More Growth After Its Latest Results

August 28, 2014 | About:
rusticnomad

rusticnomad

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Clean Energy Fuels (CLNE) released fantastic results for the second quarter. The company managed to post terrific results on the back of an increase in the gallons delivered. The  results impressed investors as well, which led the stock to rise by 1.73%. Seeing the momentum at which Clean Energy is moving, investors are quite bullish about the stock. Even management is thinking that the company will break its limits and outperform in the future as it is moving toward CNG as a fuel for heavy duty trucks.

With the future looking bright, Clean Energy looks confident for a better operational performance, delivering better results in the future. Let us have a closer look at the underlying business and the strategies that Clean Energy is working on.

In the recently reported quarter, Clean Energy’s revenue came in at $98.1 million, which is more than the $88.1 million in the second quarter of 2013, translating into a good 19% increase between the two quarters. Further, on the earnings front, the company posted a loss per share of $0.28, which outpaced analysts’ estimates by $0.02.

The way forward

Clean Energy is pleased with the growth that it is seeing in its business. It is now focusing on various aspects to improve its profitability. Clean Energy is undertaking several strategies with a view to exploring more profitable ventures in the future. The most important strategy that Clean Energy is focusing on is an expansion. The company’s expansion moves are focused in the area of natural gas as Clean Energy is expecting natural gas consumption in the transport sector to rise in the future.

It has opened about 100 truck-friendly stations to support the growing demand for natural gas fuel for nearly 280 heavy duty trucking fleet customers across the country. The expansion strategy will further include 30 LNG fuel stations, out of which 13 will be CNG fueling and the rest will be CNG stations. In addition, the company aims at increasing the pace of expansion as it is seeing growth in fleet signups, which it expects to continue.

In addition to natural gas, Clean Energy has also opened CNG stations. Also, besides fueling services, Clean Energy is providing natural gas to energy-intensive users that are beyond the reach of a pipeline in New England. This move from the company turned out to be a good and profitable move as it saw a good response from this. No sooner did Clean Energy open the CNG station, it became one of the highest-volume stations. Besides these openings, Clean Energy is also focusing on penetrating new potential markets in search of new opportunities to explore. Its inroads into newer markets such as ready mix and bulk fuel hauling are expected to bring further revenue.

Increasing agreements

The exciting news for Clean Energy is that it has entered into a CNG fueling agreement with one of the nation’s largest truck leasing companies to fuel their leased and rental fleets across several states in Clear Energy’s network. With the growing demand for natural gas as fuel in trucks, Clean Energy is seeing growing demand for natural gas trucks from full-service leasing companies.

The company’s moves show that it is in a position to deal with the growing demand in this area. In addition, Clean Energy has also signed an agreement with interstate distributors to fuel 20 LNG trucks between California and Washington State.

Moving on, Clean Energy is seeing an increase in gallon delivery. It is expecting 13.2 million additional fuelling deals, which is far more than it signed in 2013. Also, the company is seeing good growth opportunities in transit, refuse, airports and other fleet services. Clean Energy also signed a contract with Paratransit Incorporated, which has about 200 small gasoline buses.

Conclusion

Clean Energy is growing, and with its moves, it can be anticipated that the company will reach new heights in the future. Its earnings are expected to grow impressively at a CAGR of 25.00% for the next five years. Thus, Clean Energy Fuels looks like a good bet.


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