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Why Is Westport (WPRT) Down 12% Since Last Earnings Report?

Zacks Equity Research

A month has gone by since the last earnings report for Westport Innovations (WPRT). Shares have lost about 12% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Westport Fuel Q2 Earnings Meet Estimates, Revenues Up

Westport Fuel’s second-quarter 2019 net loss from continuing operations was 2 cents per share, meeting the Zacks Consensus Estimate. The same was 4 cents in second-quarter 2018. Net loss from continuing operations in the reported quarter was $2.3 million compared with $5.7 million in second-quarter 2018.

Westport Fuel logged consolidated revenues of $82.4 million in the reported quarter, up 2% year over year. Moreover, the company’s revenues top line surpassed the Zacks Consensus Estimate of $71 million.

During the quarter under review, consolidated gross margin declined to $19.3 million from $21.7 million in the year-ago quarter. This increase was due to product mix.

Adjusted EBITDA amounted to $8.1 million compared with $8.5 million in the prior-year quarter.

In the reported quarter, CWI revenues declined $2.9 million to $84 million.

Financial Position

Westport Fuel had cash and cash equivalents of $45.4 million as of Jun 30, 2019, down from $61.1 million as of Dec 31, 2018.

For the three months ended Jun 30, 2019, the company’s net cash flows from operating activities of continuing operations was $2.5 million compared with net cash flows of $2 million used in operating activities in the three months ended Jun 30, 2018.

Guidance

For 2019, the company projects consolidated revenues from continuing operations of $285-$305 million, up from previously mentioned $265-$295 million.

How Have Estimates Been Moving Since Then?

Estimates review followed a flat path over the past two months. The consensus estimate has shifted 25.93% 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 F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

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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