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What Awaits Westport Fuel (WPRT) in Q3 Earnings?

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Westport Fuel Systems Inc. (WPRT - Free Report) is expected to report third-quarter 2016 results on Nov 9. In the last quarter, the company posted a negative earnings surprise of 81.82%. Let’s see how things are shaping up for this announcement.

Factors Influencing this Quarter

Westport Fuel Systems regularly launches new products to boost sales. The company also has strategic relationships with engine producers, truck manufacturers and automotive manufacturers. These strategic associations allow the company to utilize its collaborators’ manufacturing plants, supply chains, back office systems, and distribution and sales networks, thereby aiding significant cost savings.

Moreover, Westport Fuel Systems regularly makes investments and acquisitions related to technologies and businesses that complement or help in the commercialization of its products. The company also completed the merger agreement with Fuel Systems Solutions, Inc. This merger will lead to a stronger balance sheet, better liquidity, cost reduction, technology consolidation, a wider product portfolio as well as a large global distribution network.

However, Westport Fuel Systems has been incurring losses over the past several years. The company has also been witnessing a fall in revenues (excluding revenues from Fuel Systems). Further, Westport Fuel Systems faces challenges due to fluctuations in exchange rates, low oil prices and economic volatility in some markets.

Earnings Whispers

Our proven model does not conclusively show that Westport Fuel Systems is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:

Zacks ESP: Earnings ESP for Westport Fuel Systems is currently pegged at 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 23 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

WESTPORT FUEL Price and EPS Surprise

 

WESTPORT FUEL Price and EPS Surprise | WESTPORT FUEL Quote

Zacks Rank: Westport Fuel Systems carries a Zacks Rank #3 (Hold). Though a Zacks Rank #3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Johnson Controls International plc (JCI - Free Report) will release fourth-quarter and fiscal 2016 (ended Sep 30, 2016) earnings on Nov 8, 2016. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Continental Aktiengesellschaft (CTTAY - Free Report) is expected to post third-quarter 2016 results on Nov 10, 2016. The company has a Zacks Rank #2 (Buy).

Meritor, Inc. – a Zacks Rank #3 stock – will report its fourth-quarter and fiscal 2016 (ended Sep 30, 2016) financial numbers on Nov 16.

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