Clean Energy Fuels (CLNE 1.36%), a provider of natural gas as an alternative fuel for vehicle fleets in the United States and Canada, announced its third-quarter earnings for 2024 on November 6. The company reported revenue of $104.9 million, surpassing the analysts' forecast of $100.64 million. However, the earnings per share were a net loss of $0.08, slightly better than the anticipated loss of $0.0086 per share. This reflects an improved top-line performance and a narrowed loss compared to market projections. The quarterly performance indicated ongoing progress in the company's transition to Renewable Natural Gas (RNG) and infrastructure expansion, despite facing challenges in environmental credit volatility.
| Metric | Q3 2024 Result | Estimate | Q3 2023 Result | % Change YoY |
|---|---|---|---|---|
| Total Revenue (in millions) | $104.9 | $100.64 | $95.6 | 9.7% |
| Earnings per Share (EPS) | $(0.08) | $(0.0086) | $(0.08) | N/A |
| RNG Gallons Sold (in millions) | 59.6 | N/A | 56.7 | 5.1% |
| Interest Expense (in millions) | $8.357 | N/A | $3.893 | 114.8% |
Source: Analyst estimates for the quarter provided by FactSet.
Company Overview and Current Focus
Clean Energy Fuels specializes in providing sustainable fuel solutions to the heavy-duty vehicle market. The company is focused on transitioning its entire business model towards RNG, which is derived from renewable sources like livestock waste and landfills, offering significant environmental benefits. By 2025, it plans to have all its vehicle fuel sales derived from RNG. This strategy aligns with the global trend towards more sustainable energy sources and provides a competitive edge in the clean energy market.
Recent efforts have also been directed towards expanding its infrastructure network, including RNG production and fueling stations. Clean Energy Fuels has strategically partnered with major fleet operators and other energy firms to enhance its market penetration and support the growing demand for RNG.
NASDAQ: CLNE
Key Data Points
Quarterly Highlights
During the third quarter of 2024, Clean Energy Fuels continued its progress in the RNG sector, selling 59.6 million gallons, up from 56.7 million in the prior year. Revenue from RNG, along with RIN and LCFS credits, stood out, reflecting an increase due to higher RIN credit prices. Despite the revenue growth, net losses continued, partly attributed to $14.1 million in Amazon warrant charges, a non-cash item affecting reported earnings.
Financially, there was a notable increase in interest expense, rising to $8.357 million from $3.893 million a year earlier. This reflected an increased debt load but also better cash management strategies that improved interest income. Product cost efficiency was highlighted as another positive, demonstrating improved operational management with decreased costs compared to the sales increase.
On the operational side, the enhancement of its infrastructure continued with the addition of new CNG stations in Western Canada. A pivotal partnership involved breaking ground on a new RNG production facility at South Fork Dairy, expected to produce 2.6 million gallons annually.
This quarter also saw a strategic agreement with the Houston Metropolitan Transit Authority, expanding the company's market reach within mass transit. The focus on corporate and municipal partnerships is essential for broadening its customer base and securing a steady demand for RNG.
Looking Forward
The management at Clean Energy Fuels reaffirmed its annual GAAP net loss forecast for 2024, estimating losses between $91 million and $81 million, with adjusted EBITDA expectations stable at the $62 million to $72 million range. These figures reflect ongoing investments in infrastructure and production alongside strategic partnerships.
Going forward, investors should monitor the company's advancements in RNG capacity and market demand closely. The continuation of favorable regulatory policies for renewable fuels remains crucial.
