FuelCell Energy (FCEL Quick QuoteFCEL - Free Report) posted a second-quarter fiscal 2026 adjusted loss of 58 cents per share, wider than the Zacks Consensus Estimate of a 54-cent loss. The underperformance was tied largely to softer service and generation activity. Management attributed the service decline to the absence of module exchanges during the quarter, while generation revenue reflected lower operating output as the Groton project underwent repairs.

However, the bottom line improved from the year-ago adjusted loss of $1.79 on the back of cost reduction and operating efficiency.

Quarterly revenues came in at $35.6 million, below the Zacks Consensus Estimate of $41 million and the year-ago sales of $37.4 million. Even so, contracted backlog remained sizable at more than $1.1 billion as of April 30, 2026.

FuelCell Energy generated $18 million of product revenues in the quarter, supported by scheduled module deliveries to Gyeonggi Green Energy in South Korea. Service revenues were $4.2 million, while generation revenues were $8.7 million and advanced technologies revenues were $4.7 million.

FuelCell Energy, Inc. Price, Consensus and EPS Surprise

FuelCell Energy, Inc. price-consensus-eps-surprise-chart | FuelCell Energy, Inc. Quote

FuelCell Energy Leans Into Data Centers as Pipeline Jumps

FCEL emphasized accelerating demand for behind-the-meter baseload power tied to AI and high-density data center buildouts. During the quarter, the company highlighted a 4-gigawatt proposal pipeline, with data centers accounting for roughly 89% of the total.

Management also pointed to a larger deal profile, with average proposal size rising to 130 megawatts as of May 1, 2026. The company believes its standardized 12.5-megawatt “FuelCell Energy Block” is designed to reduce repeat engineering and permitting work and support faster multi-megawatt deployments.

FCEL Takes a Large Hit From Groton-Related Charges

Profitability was weighed down by a significant non-cash impairment tied to the Groton project. The company recorded a $42.6 million impairment expense related to its decision to upgrade equipment at the 7.4-megawatt Groton Navy project to utilize three standard 2.5-megawatt blocks.

As a result, operating expenses rose to about $65 million in the quarter, and loss from operations widened to $77.9 million. While the impairment drove most of the year-over-year increase, management framed the upgrade as a reliability-focused decision tied to supporting a critical U.S. government asset.

FuelCell Energy’s Cash Position Strengthens After Equity Sales

FuelCell Energy ended the quarter with $440.9 million in total cash, cash equivalents and restricted cash, including $373.2 million of unrestricted cash and $67.7 million of restricted cash.

The balance sheet benefited from equity issuance under the company’s at-the-market program. During the quarter, FCEL sold about 10.9 million shares at an average price of $9.45 per share for net proceeds of roughly $100.4 million, and it completed additional sales after quarter-end at a higher average price.

FCEL Scales Torrington Toward 500 MW of Annual Capacity

FCEL is moving forward with manufacturing expansion at its Torrington, CT facility, initiating work to support an annualized production rate of up to 500 megawatts. The company reiterated an estimated total expansion cost of $200-$275 million, with execution expected over the next 24 months.

For fiscal 2026 specifically, management maintained its $20-$30 million capital spending plan tied to the ramp, while noting that capacity will be expanded in alignment with demand and structured capital support. Separately, the company reiterated a key profitability marker, targeting adjusted EBITDA positivity once it reaches consistent production volumes at or above a 100-megawatt annualized run rate.

Zacks Rank & Stocks to Consider

FuelCell Energy carries a Zacks Rank #3 (Hold) at present. Meanwhile, investors interested in the Oil/Energyspace might look at operators such as Marathon Petroleum (MPC Quick QuoteMPC - Free Report) , Nabors Industries (NBR Quick QuoteNBR - Free Report) and Patterson-UTI Energy (PTEN Quick QuotePTEN - Free Report) . Marathon Petroleum is a Zacks Rank #1 (Strong Buy) stock, while Nabors Industries and Patterson-UTI Energy hold a Zacks Rank #2 (Buy) each.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Marathon Petroleum: Marathon Petroleum is a major U.S. energy company focused on refining, marketing, midstream services and renewable diesel. Its integrated network spans the Gulf Coast, Mid-Continent and West Coast, supported by strong logistics and access to key crude and product markets. MPC beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, with the average being 49.5%. Over the past 60 days, the Zacks Consensus Estimate for the company’s 2026 earnings has gone up almost 40%.

Nabors Industries: Nabors Industries is a global drilling and drilling-technology company serving oil and gas customers in major energy markets. It operates land and offshore rigs across the United States, Saudi Arabia and Latin America, supported by about 14,000 employees from more than 85 nationalities. Nabors has a market capitalization of $1.5 billion. The Zacks Consensus Estimate for 2026 earnings for the firm indicates 71.2% growth.

Patterson-UTI Energy: Patterson-UTI is an integrated oilfield services company focused on drilling, completion and drilling products markets. The company operates 137 Tier-1 super-spec rigs and 2.7 million hydraulic horsepower of completion capacity. PTEN has a market capitalization of $4.5 billion. Over the past 60 days, the Zacks Consensus Estimate for Patterson-UTI’s 2026 earnings has moved up 53.1%.