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Westport (WPRT) Down 7.5% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Westport Innovations (WPRT - Free Report) . Shares have lost about 7.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Westport due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Westport incurred a loss of 43 cents per share in the second quarter of 2024, narrower than the Zacks Consensus Estimate of a loss of 55 cents. The company had incurred a loss of 60 cents in the year-ago period.
WPRT registered consolidated revenues of $83.4 million, missing the Zacks Consensus Estimate of $86 million. The top line also fell from $85 million generated in the corresponding quarter of 2023. The company delivered an adjusted EBITDA of negative $2 million compared with negative $4 million recorded in the year-ago period.
Segmental Takeaways
From the second quarter of 2024, Westport has started reporting its results under five reportable segments: HPDI JV, Light-Duty, High-Pressure Controls and Systems, Heavy-Duty OEM and Corporate.
HPDI JV: The segment reported net sales of $4.1 million and incurred an operating loss of $2 million in the second quarter of 2024.
Light-Duty: Net sales of the segment totaled $69.5 million, down from $73.7 million in the second quarter of 2023. The downside was mainly due to a decrease in sales in delayed original equipment manufacturer (OEM), independent aftermarket and fuel storage businesses.
The segment reported an operating income of $3.3 million against the year-ago quarter’s operating loss of $1.8 million. Gross profit increased to $15.1 million (22% of revenues) from the year-ago period’s $12.7 million (17% of revenues), primarily due to a change in sales mix.
High-Pressure Controls and Systems: Net sales of the segment totaled $3.4 million compared with $2.8 million in the year-ago period. Increased sales volumes in product and service revenues lead to a year-over-year rise. The segment incurred an operating loss of $0.9 million compared with the operating loss of $0.6 million reported in the corresponding quarter of 2023.
In the reported quarter, gross profit rose $0.1 million to $0.7 million, representing 21% of revenues. The company’s gross profit was $0.6 million or 21% of revenues in the second quarter of 2023.
Heavy-Duty OEM: Net sales of the segment totaled $10.5 million compared with $8.5 million in the year-ago period. An increase in product and engineering sales when the company wholly owned the HPDI business led to a year-over-year rise. The segment incurred an operating loss of $2.3 million compared with the loss of $3.3 million reported in the corresponding quarter of 2023.
Gross profit increased to $1.3 million (12% of revenues) compared with $1.1 million (13% of revenues) in the second quarter of 2023.
Corporate: The segment reported an operating loss of $5.4 million compared with an operating loss of $4.5 million reported in the year-ago period.
Financials
Westport had cash and cash equivalents (including restricted cash) of $41.5 million as of Jun 30, 2024, down from $54.85 million at the end of 2023. Long-term debt decreased to $26.36 million as of Jun 30, 2024, from $30.96 million as of Dec 31, 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 35.79% due to these changes.
VGM Scores
Currently, Westport has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Westport has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Westport (WPRT) Down 7.5% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Westport Innovations (WPRT - Free Report) . Shares have lost about 7.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Westport due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Westport Q2 Earnings Beat Estimates, Sales Decline Y/Y
Westport incurred a loss of 43 cents per share in the second quarter of 2024, narrower than the Zacks Consensus Estimate of a loss of 55 cents. The company had incurred a loss of 60 cents in the year-ago period.
WPRT registered consolidated revenues of $83.4 million, missing the Zacks Consensus Estimate of $86 million. The top line also fell from $85 million generated in the corresponding quarter of 2023. The company delivered an adjusted EBITDA of negative $2 million compared with negative $4 million recorded in the year-ago period.
Segmental Takeaways
From the second quarter of 2024, Westport has started reporting its results under five reportable segments: HPDI JV, Light-Duty, High-Pressure Controls and Systems, Heavy-Duty OEM and Corporate.
HPDI JV: The segment reported net sales of $4.1 million and incurred an operating loss of $2 million in the second quarter of 2024.
Light-Duty: Net sales of the segment totaled $69.5 million, down from $73.7 million in the second quarter of 2023. The downside was mainly due to a decrease in sales in delayed original equipment manufacturer (OEM), independent aftermarket and fuel storage businesses.
The segment reported an operating income of $3.3 million against the year-ago quarter’s operating loss of $1.8 million. Gross profit increased to $15.1 million (22% of revenues) from the year-ago period’s $12.7 million (17% of revenues), primarily due to a change in sales mix.
High-Pressure Controls and Systems: Net sales of the segment totaled $3.4 million compared with $2.8 million in the year-ago period. Increased sales volumes in product and service revenues lead to a year-over-year rise. The segment incurred an operating loss of $0.9 million compared with the operating loss of $0.6 million reported in the corresponding quarter of 2023.
In the reported quarter, gross profit rose $0.1 million to $0.7 million, representing 21% of revenues. The company’s gross profit was $0.6 million or 21% of revenues in the second quarter of 2023.
Heavy-Duty OEM: Net sales of the segment totaled $10.5 million compared with $8.5 million in the year-ago period. An increase in product and engineering sales when the company wholly owned the HPDI business led to a year-over-year rise. The segment incurred an operating loss of $2.3 million compared with the loss of $3.3 million reported in the corresponding quarter of 2023.
Gross profit increased to $1.3 million (12% of revenues) compared with $1.1 million (13% of revenues) in the second quarter of 2023.
Corporate: The segment reported an operating loss of $5.4 million compared with an operating loss of $4.5 million reported in the year-ago period.
Financials
Westport had cash and cash equivalents (including restricted cash) of $41.5 million as of Jun 30, 2024, down from $54.85 million at the end of 2023. Long-term debt decreased to $26.36 million as of Jun 30, 2024, from $30.96 million as of Dec 31, 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 35.79% due to these changes.
VGM Scores
Currently, Westport has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Westport has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.