Westport (WPRT) Incurs Narrower-Than-Expected Loss in Q3
Westport Fuel Systems Inc. WPRT incurred a loss of 68 cents per share in third-quarter 2023, narrower than the Zacks Consensus Estimate of a loss of 75 cents. The loss also narrowed from 70 cents per share incurred in the year-ago period. Westport registered consolidated revenues of $77.4 million in the quarter, in line with the Zacks Consensus Estimate. The top line rose from $71.2 million generated in the corresponding quarter of 2022. The company delivered an adjusted EBITDA of negative $3 million in the quarter under review compared with negative $4.5 million recorded in the year-ago period.
Westport Fuel Systems Inc. Price, Consensus and EPS Surprise
Westport Fuel Systems Inc. price-consensus-eps-surprise-chart | Westport Fuel Systems Inc. Quote
Segmental Takeaways
Original Equipment Manufacturer (OEM): Net sales of the segment totaled $52.9 million, up from $44.1 million in the third quarter of 2022. The upside was mainly due to higher sales volumes in the delayed OEM, electronics, and fuel storage businesses. Additionally, increased engineering service revenues from the heavy-duty OEM business aided results. The metric also surpassed our estimate of $46.8 million.
The segment reported an operating loss of $6.2 million, narrower than a loss of $7.3 million incurred in the year-ago period and our forecast of $8.7 million. Gross margin increased to $7.8 million (15% of revenue) from the year-ago period’s level of $4.7 million (11% of revenue), driven by increased sales volumes in delayed OEM, electronics and fuel storage businesses, partly offset by high commodity and labor costs coupled with logistical challenges.
Independent Aftermarket (IAM): Net sales of the segment totaled $24.5 million compared with $27.1 million in the year-ago period. The metric missed our estimate of $29.6 million. The IAM segment reported an operating loss of $0.9 million against an income of $2.2 million generated in the year-ago period. Our forecast for operating income was $1.2 million.
In the quarter, the gross margin contracted $1.2 million to $5.4 million, representing 22% of revenues. This compares to $6.6 million (24% of revenues) in the third quarter of 2022. Lower sales volumes in Africa and Europe hurt sales and margins.
Financials
Westport had cash and cash equivalents of $44 million as of Sep 30, 2023, down from $86.2 million at the end of 2022. Long-term debt decreased to $23.2 million at the end of third-quarter 2023 from $32.2 million on Dec 31, 2022.
Zacks Rank & Key Picks
WPRT currently carries a Zacks Rank #3 (Hold).
A few top-ranked players in the auto space include Toyota TM, PACCAR PCAR and O’Reilly Automotive ORLY. While TM sports a Zacks Rank #1 (Strong Buy) currently, PCAR and ORLY carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TM’s fiscal 2024 sales and EPS implies year-over-year growth of 10.5% and 29.7%, respectively. The earnings estimate for fiscal 2024 and 2025 has been revised upward by 46 cents and 26 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for PCAR’s 2023 sales and EPS implies year-over-year growth of 20% and 56%, respectively. The earnings estimate for 2023 and 2024 has been revised upward by 45 cents and 44 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for ORLY’s 2023 EPS and sales implies year-over-year growth of 14% and 10%, respectively. The earnings estimate for 2023 and 2024 has been revised upward by 6 cents and 4 cents, respectively, in the past seven days.
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