Capstone Backlog & Contract May Trump Earnings (CPST)

Capstone Turbine Corporation (NASDAQ: CPST) has reported its long awaited earnings after today’s close.  The microturbine energy systems manufacturer posted earnings of -$0.07 EPS on a 60% revenue gain to $9.3 million.  First Call had estimates at -$0.05 EPS and $9.27 million.

The company further disclosed that its order backlog is now at $27.9 million, which represents a 113% sequential increase from last quarter and more than a 450% gain over the same quarter in 2007.  To compare the backlog for reference its entire 2007 sales were about $21 million.

Frankly, we weren’t really looking at earnings as we disclosed in our full earnings preview because of the  thin broker and analyst coverage that we thought the best focus was likely its backlog and its body language on its ability to secure newer and steady orders.

Besides earnings, the company secured a 3-year National Account Agreement with OfficePower, Inc. In addition, OfficePower placed its initial order under the agreement for approximately $3.5M including the first order for C1000 MicroTurbine® systems to be deployed in the U.S. market.

Shares closed up 1.5% at $3.41 today and its shares are down 1.7% at $3.41 in after-hours trading.  This has been our top alternative energy pick and up more than 200% for our "10 Stocks Under $10" weekly subscriber letter and we aren’t really surprised at all in the overall lack of gains after such a large run.  Who knows, maybe it will give an entry again for new money….

Jon C. Ogg
June 12, 2008