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What: Shares of Ballard Power Systems Inc. (NASDAQ: BLDP) jumped as much as 20.3% on Thursday after the company signed a distribution deal with Toyota (NYSE: TM) in Japan. Shares were still up 12.4% at 12:10 p.m. EDT.
So what: Ballard signed a distribution agreement with Toyota subsidiary Toyota Tsusho Corporation, which will distribute Ballard fuel cell products in Japan. The deal runs through the end of 2020.
It's not yet clear what the financial impact would be for Ballard, but Japan's government plans to spend $100 million building out hydrogen infrastructure in the next five years.
Now what: Deals like this are a positive step forward for Ballard, but they don't yet mean the company will be profitable. In the second quarter, the company lost $5.8 million on $17.6 million in revenue. Before getting too excited about these kind of deals, I would like to see the bottom line turn from losses to profits. Today's announcement could be a step in that direction, but Ballard isn't financially stable just yet.
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Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.