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Westport Fuel Systems (WPRT) Q2 Adjusted Loss Widens Y/Y
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Westport Fuel Systems Inc. (WPRT - Free Report) recorded adjusted loss of 40 cents per share in the second quarter of 2016, wider than the year-ago loss of 27 cents. Moreover, the adjusted loss, which excludes 44 cents from non-recurring items, was much wider than the Zacks Consensus Estimate of a loss of 22 cents.
Including non-recurring items, net income amounted to $3.7 million or 5 cents per share, mainly due to a $42.9 million one-time non-cash gain on the bargain purchase transaction related to the merger of Westport Innovations Inc. and Fuel Systems Solutions, Inc.
Westport Fuel Systems logged revenues of $44.4 million in the second quarter of 2016, up 59.4% year over year, due to the addition of Fuel Systems' revenues. Moreover, the figure surpassed the Zacks Consensus Estimate of $39 million.
Consolidated gross margin increased 7.5% to $10 million (22.5% of sales) in second-quarter 2016 from $9.3 million (33.4% of sales) in the year-ago quarter. The decrease in gross margin percentage was mainly due to a large service contract completed in the prior-year quarter.
Consolidated adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) amounted to a negative $10.3 million, compared with a negative $7.7 million in the second quarter of 2015. The decrease was due to lower revenue and income generated from joint ventures (JVs).
Segment Details
In the second quarter of 2016, Westport Fuel Systems sold part of its economic interest in Weichai Westport Inc. (WWI) to Cartesian Capital Group for $6.3 million together with a potential future payment based on Cartesian's return on investment. As a result, the company has removed WWI as a business segment.
Westport Fuel Systems now has four reporting segments: Automotive Business Unit, Industrial Business Unit, Corporate and Technology Investments Business Unit, and Cummins Westport Inc. (CWI) JV.
Automotive Business Unit recorded a 43% increase in revenues to $35.3 million due to the addition of Fuel Systems' revenues. Operating loss in the segment widened to $5.8 million in the reported quarter from $3.1 million in the second quarter of 2015.
Industrial Business Unit reported revenues of $8.2 million, which were solely generated from the Fuel Systems business. Operating income at the segment was $0.7 million in the reported quarter.
Corporate and Technology Investments Business Unit revenues plunged 72% to $0.9 million from $3.2 million in the year-ago quarter due to a large service contract completed in the prior-year quarter. Operating loss amounted to $21.8 million compared with a loss of $16.5 million recorded a year ago.
The CWI JV recorded a 20.9% decrease in revenues to $73.6 million, mainly due to macroeconomic conditions. CWI operating income attributable to Westport Fuel Systems was $1.5 million in the reported quarter compared with $3.4 million in the year-ago period. The decline in operating income was due to lower sales and higher engineering expense.
Financial Position
Westport Fuel Systems had cash and cash equivalents of $70.4 million as of Jun 30, 2016, up from $27.1 million as of Dec 31, 2015. Long-term debt was $81.5 million as of Mar 31, 2016, up from $62.4 million as of Dec 31, 2015.
In the first half of 2016, Westport Fuel Systems’ cash used in operations was $46.9 million, compared with $39.2 million in the year-ago period.
Westport Fuel Systems currently carries a Zacks Rank #2 (Buy). Some other well-ranked automobile stocks include The Goodyear Tire & Rubber Company (GT - Free Report) , Visteon Corporation (VC - Free Report) and Gentex Corp. (GNTX - Free Report) , each carrying a Zacks Rank #2.
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Westport Fuel Systems (WPRT) Q2 Adjusted Loss Widens Y/Y
Westport Fuel Systems Inc. (WPRT - Free Report) recorded adjusted loss of 40 cents per share in the second quarter of 2016, wider than the year-ago loss of 27 cents. Moreover, the adjusted loss, which excludes 44 cents from non-recurring items, was much wider than the Zacks Consensus Estimate of a loss of 22 cents.
Including non-recurring items, net income amounted to $3.7 million or 5 cents per share, mainly due to a $42.9 million one-time non-cash gain on the bargain purchase transaction related to the merger of Westport Innovations Inc. and Fuel Systems Solutions, Inc.
Westport Fuel Systems logged revenues of $44.4 million in the second quarter of 2016, up 59.4% year over year, due to the addition of Fuel Systems' revenues. Moreover, the figure surpassed the Zacks Consensus Estimate of $39 million.
Consolidated gross margin increased 7.5% to $10 million (22.5% of sales) in second-quarter 2016 from $9.3 million (33.4% of sales) in the year-ago quarter. The decrease in gross margin percentage was mainly due to a large service contract completed in the prior-year quarter.
Consolidated adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) amounted to a negative $10.3 million, compared with a negative $7.7 million in the second quarter of 2015. The decrease was due to lower revenue and income generated from joint ventures (JVs).
Segment Details
In the second quarter of 2016, Westport Fuel Systems sold part of its economic interest in Weichai Westport Inc. (WWI) to Cartesian Capital Group for $6.3 million together with a potential future payment based on Cartesian's return on investment. As a result, the company has removed WWI as a business segment.
Westport Fuel Systems now has four reporting segments: Automotive Business Unit, Industrial Business Unit, Corporate and Technology Investments Business Unit, and Cummins Westport Inc. (CWI) JV.
Automotive Business Unit recorded a 43% increase in revenues to $35.3 million due to the addition of Fuel Systems' revenues. Operating loss in the segment widened to $5.8 million in the reported quarter from $3.1 million in the second quarter of 2015.
Industrial Business Unit reported revenues of $8.2 million, which were solely generated from the Fuel Systems business. Operating income at the segment was $0.7 million in the reported quarter.
Corporate and Technology Investments Business Unit revenues plunged 72% to $0.9 million from $3.2 million in the year-ago quarter due to a large service contract completed in the prior-year quarter. Operating loss amounted to $21.8 million compared with a loss of $16.5 million recorded a year ago.
The CWI JV recorded a 20.9% decrease in revenues to $73.6 million, mainly due to macroeconomic conditions. CWI operating income attributable to Westport Fuel Systems was $1.5 million in the reported quarter compared with $3.4 million in the year-ago period. The decline in operating income was due to lower sales and higher engineering expense.
Financial Position
Westport Fuel Systems had cash and cash equivalents of $70.4 million as of Jun 30, 2016, up from $27.1 million as of Dec 31, 2015. Long-term debt was $81.5 million as of Mar 31, 2016, up from $62.4 million as of Dec 31, 2015.
In the first half of 2016, Westport Fuel Systems’ cash used in operations was $46.9 million, compared with $39.2 million in the year-ago period.
WESTPORT FUEL Price, Consensus and EPS Surprise
WESTPORT FUEL Price, Consensus and EPS Surprise | WESTPORT FUEL Quote
Zacks Rank
Westport Fuel Systems currently carries a Zacks Rank #2 (Buy). Some other well-ranked automobile stocks include The Goodyear Tire & Rubber Company (GT - Free Report) , Visteon Corporation (VC - Free Report) and Gentex Corp. (GNTX - Free Report) , each carrying a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>