BE slides to 4-year low as interest rates weigh on customer demand

Bloom Energy (BE), a leading provider of clean and efficient energy solutions, reported its Q4 earnings for 2023. Results fell short of expectations as the company witnessed a slowdown in customer orders due to higher interest rates. This morning"s PPI news will further pressure rates and weigh on alternative energy stocks. Shares dived below the $10-psyche level and hit $9.41, their lowest level since June 2020. 

The company's earnings per share (EPS) came in at $0.07, which was $0.02 lower than the consensus of $0.09. Additionally, revenues plummeted by 22.8% year-over-year to $356.92 million, falling short of the $470.76 million expectations.

The company also provided downside guidance for FY24, projecting revenues between $1.4 billion and $1.6 billion. This outlook was lower than the consensus of $1.74 billion.

One significant development is the departure of Bloom Energy's President and CFO Greg Cameron, who has notified the company of his intention to leave his role. The company has engaged Caldwell Partners to identify potential candidates for the Chief Financial Officer position. It is important to note that Mr. Cameron's departure is not due to any disagreement with the company's operations, policies, or practices.

The financial community had mixed reactions to Bloom Energy's Q4 results. JP Morgan believes that the departure of CFO Greg Cameron, who had been instrumental in driving margin improvement during his tenure, might be viewed negatively by investors. However, the company's record high backlog, particularly in Services, suggests potential growth opportunities in Product/Install visibility, driven by data center demand and other factors.

On the other hand, Keybank expressed concerns about the weaker-than-expected 2024 outlook, attributing it to the evolving Combined Heat and Power system in Korea and uncertainties regarding the timing of shipments to Korea and data center-related bookings. KEYB also highlighted the lack of a clear successor for the CFO position as another reason behind their caution.

Bloom Energy reported a decrease in revenue for Q4 2023 compared to the same period in the previous year. Product and service revenue declined by 21.4% to $314.4 million. However, the company achieved a significant improvement in gross margin, reaching 25.9% in Q4 2023, compared to 15.4% in Q4 2022. The non-GAAP gross margin, although lower year-over-year, stood at 27.4% in Q4 2023.

Operating profit showed a positive turnaround, reaching $12.9 million in Q4 2023, a significant improvement from the operating loss of $40.6 million reported in Q4 2022. However, the non-GAAP operating profit dropped to $27.4 million in Q4 2023, declining by $31.6 million compared to the non-GAAP operating profit of $59.0 million in Q4 2022.

Bloom Energy's Founder, Chairman, and CEO, KR Sridhar, expressed optimism about the company's performance in 2023, highlighting the record revenue achieved and the focus on operational excellence and innovation. Sridhar emphasized the aim to meet the increasing demand for clean energy across various industries and the development of new offerings such as the Combined Heat and Power system and the Be Flexible™ load following product.

Despite the challenges posed by uncertainties in the global market and the departure of the CFO, Bloom Energy remains committed to its mission of providing efficient and sustainable energy solutions. The company has set its outlook for full-year 2024, projecting revenues between $1.4 billion and $1.6 billion, a non-GAAP gross margin of around 28%, and a non-GAAP operating income of $75 million to $100 million.