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Why Is Westport (WPRT) Down 31.9% Since Last Earnings Report?

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It has been about a month since the last earnings report for Westport Innovations (WPRT - Free Report) . Shares have lost about 31.9% 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 the most recent earnings report in order to get a better handle on the important catalysts.

Westport Fuel Misses on Q3 Earnings, Lifts 2018 View

Westport Fuel’s third-quarter 2018 adjusted net loss from continuing operations was 9 cents per share, missing the Zacks Consensus Estimate of 5 cents. Net loss per share from continuing operations was 15 cents per share in third-quarter 2017.

Net loss from continuing operations in the reported quarter was $12.1 million compared with $16.2 million in third-quarter 2017.

Westport Fuel logged consolidated revenues of $65.5 million in the quarter under review, up 16% year over year. Moreover, the top line surpassed the Zacks Consensus Estimate of $56.8 million. This upside was driven by strong sales growth in aftermarket and OEM business, which include shipment of Westport HPDI 2.0 product.

During the quarter under review, consolidated gross margin increased to $15.6 million (24% of sales) from $13.7 million (24% of sales) in the year-ago quarter.

Adjusted EBITDA amounted to $4.3 million compared with a negative $5.7 million in the prior-year quarter, reflecting higher revenues and CWI income, and lower operating expenses.

In third-quarter 2018, CWI revenues rose to $86.2 million from the prior-year quarter’s $75.5 million. This rise was driven by higher demand for near-zero emission products and greater service part revenues.

Financial Position

Westport Fuel had cash and cash equivalents of $54.2 million as of Sep 30, 2018, up from $51.2 million as of Jun 30, 2018.

At the end of the third quarter, cash outflow from operations was $16.2 million in comparison with the prior-year quarter’s $20.8 million.

Guidance

For 2018, Westport Fuel expects consolidated revenues from continuing operations to be $260-$275 million, up from $235-$255 million stated earlier.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a flat path over the past two months.

VGM Scores

At this time, Westport has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. 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 D. 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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