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Westport (WPRT) Q2 Loss Narrower Than Expected, Revenues Up

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Westport Fuel Systems Inc. (WPRT - Free Report) incurred a loss of 7 cents per share in second-quarter 2022 against a profit of 7 cents in the year-ago period. The figure was narrower than the Zacks Consensus Estimate of a loss of 8 cents. Westport registered consolidated revenues of $80 million in the quarter, beating the Zacks Consensus Estimate of $75.9 million. The top line rose 1% from the year-ago level of $79 million.

Westport generated a negative adjusted EBITDA of $4.3 million in the second quarter against $6.2 million in the year-ago period. This was mainly due to pressure from supply chain & inflation on production cost.

Westport Fuel Systems Inc. Price, Consensus and EPS Surprise

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 jumped 14.4% year over year to $54.2 million in the reported quarter, mainly due to additional revenues from the acquired Stako sp. zo.o fuel storage business, increased light-duty OEM business sales volumes to OEMs in India and higher sales volume in electronic and hydrogen products. The segment reported an operating loss of $5.6 million, wider than the loss of $3.4 million incurred in the year-ago period. In the quarter, gross margin decreased to $4.7 million or 9% of revenues compared with $7.2 million or 15% of revenues in the year-ago quarter due to reduced sales volumes to the European OEM customers caused by higher relative CNG fuel prices.

Independent Aftermarket (IAM): Net sales of the segment totaled $25.7 million, down 18.6% from the year-ago period, primarily due to decreased sales volumes to Russian customers due to the Russia-Ukraine war, lower sales volumes to Argentina and Turkey and a fall in sales to Africa. In the quarter, the segment incurred an operating income of $0.08 million, plummeting from $1.1 million in second-quarter 2021. Gross margin in the quarter decreased to $5.8 million or 23% of revenues compared with $8.5 million or 27% of revenues in the year-ago period. The decrease was led by lower sales volumes and higher production input costs incurred in materials, transportation and utility costs brought by the global supply chain shortage and inflation.

Corporate Business Segment: In the reported quarter, operating loss for the segment amounted to $5.8 million, widening from the loss of $1.4 million reported in the year-earlier period.

Financials

Westport had cash and cash equivalents of $98.2 million as of Jun 30, 2022, down from $124.9 million at end of 2021. Long-term debt decreased to $37.2 million at the end of second-quarter 2022 from $45.1 million on Dec 31, 2021. Net cash flow used in operating activities was $16.5 million, a sharp increase from $8.7 million from the prior-year period.

Zacks Rank & Key Picks

WPRT carries a Zacks Rank #4 (Sell), currently.

Better-ranked players in the auto space include Harley-Davidson (HOG - Free Report) , Genuine Parts Company (GPC - Free Report) and Tesla Inc. (TSLA - Free Report) , each carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Harley-Davidson has an expected earnings growth rate of 6.9% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 7% upward in the past 30 days.

Harley-Davidson’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. HOG pulled off a trailing four-quarter earnings surprise of 49.52%, on average. The stock has risen 1.4% in the past year.

Genuine Parts has an expected earnings growth rate of 15% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 1.3% upward in the past 30 days.

Genuine Parts’ earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of 11.03%, on average. The stock has risen 8.3% over the past year.

Tesla has an expected earnings growth rate of 74.63% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 6.7% upward in the past 30 days.

Tesla’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 32.17%, on average. The stock has decreased 17.5% in the past year.