Less than nine years ago, shares of Capstone Turbine (Nasdaq: CPST) crested at almost $100 on hopes that the California-based microturbine maker would revolutionize ultra-low-emission, ultra-low-maintenance power generation technology. When things didn't quite work out that way, shares plummeted. Since those heady days, the stock has dropped a staggering 99%. But a turnaround could be in the making.

In its most recent quarter, Capstone's sales grew by 83% to $13.7 million, due largely to higher prices for its products, while total operating expenses fell significantly due to reductions in research and development and general overhead. Until taking a hit for changes in the fair value of its warrant liability, Capstone had everything in place for a good quarter. However, after the $5.2 million charge, net losses landed at $15.3 million, or $0.08 per share, missing analysts' estimates by $0.03 per share.

Turnaround time?
Despite the charge, it was an eventful quarter for Capstone, and it marks the start of what could be a historic year for the clean energy corporation that has never earned a profit since it became a publicly listed company. CEO Darren Jamison declared: "I believe fiscal 2009 was best described as Capstone's year of growth, while I believe fiscal 2010 will best be described as Capstone's year of cost reduction, working capital improvement, and positive cash flow."

These words are nothing trivial to anyone familiar with the Capstone story, especially in a calendar year its strategic partnership with United Technologies (NYSE: UTX) ended. United Technologies wasn't just one of its biggest customers -- its UTC Power subsidiary also provided Capstone with R&D funding benefits through its cost-sharing program.

Politics or profit
Jamison's words might be rhetoric aimed at rekindling downtrodden investors' hope in the company's future, but I believe they hold merit. Capstone's overall backlog has only decreased by 6% in the past three months to about 67.4 megawatts, which means that while the weak economy is dragging down spending across the board, Capstone's products continue to get support from its customers.

Meanwhile, over the next three quarters, management is confident in its plans to increase its average selling prices, as its price hike of 14% on its C1000 model fully takes effect. Meanwhile, the company will take action to achieve 30% cost reduction. All of this is obviously very exciting news for Capstone.

And like other alternative energy investments like First Solar (Nasdaq: FSLR) or Energy Conversion Devices (Nasdaq: ENER), Capstone stands for something in which you can believe: a cleaner tomorrow. So if you're in the market for a speculative stock that's overdue for a turnaround, consider Capstone Turbine.