Fuel-Tech: Not Selling Enough Pollution Control Systems (FTEK)

Fuel-Tech, Inc. (NASDAQ:FTEK) is finding itself in a bit of a conundrum this morning.  The pollution control company for a greener world, or a less-brown world, is feeling some pain this morning.  The company’s net EPS fell to $0.01, but the real damage today is the light revenues and light revenue guidance.  It now sees a revenue range of $80 to $85 million, down from prior targets of $90 to $95 million. 

Before the 12% pre-market drop, Fuel-Tech had a maket cap in excess of $600 million based upon the promise of all the nasty coal plants needing to buy the company’s pollution control systems.  This isn’t going to bode well for alternative energy or green energy investors looking to make a buck.  These systems are supposed to quite strong and quite effective, yet the company may find that it won’t as easily be able to ramp that market penetration from a few percentage points of dirty power plants to a majority.

The blame is on the Fuel-Chem sales being hurt by plant outages and production problems at several utility customers, as well as new program delays at five coal-fired utility boilers.  What the company is saying without saying it, is that it is still a niche play that hasn’t been able to tap into the mainstream and is far too dependent on a handful of orders.  From an outsider view, it sounds a lot like they need more sales and more green-marketing….and maybe more green lobbying.

Shares are down about 12% pre-market at $24.55. It has a wide trading range with a $11.20 to $38.20 range over the last year.

Jon C. Ogg
August 6, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.