Yahoo Finance Westport (WPRT) Up 13.8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Westport Innovations (WPRT). Shares have added about 13.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Westport due for a pullback? 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 drivers.
Westport Incurs Wider-Than-Anticipated Loss in Q1
Westport incurred a loss of 79 cents per share in the first quarter of 2024, wider than the Zacks Consensus Estimate of a loss of 55 cents. It registered consolidated revenues of $77.6 million, missing the Zacks Consensus Estimate of $88 million. The top line also fell from $82.2 million generated in the corresponding quarter of 2023. The company delivered an adjusted EBITDA of negative $6.6 million compared with negative $4.5 million recorded in the year-ago period.
Segmental Takeaways
Original Equipment Manufacturer (OEM): Net sales of the segment totaled $49.3 million, down from $56.3 million in the first quarter of 2023. The downside was mainly due to lower sales in DOEM, fuel storage and light-duty OEM businesses. The metric also missed our estimate of $63.2 million.
The segment reported an operating loss of $8.3 million, wider than a loss of $6 million incurred in the year-ago period and our forecast of a loss of $5.6 million. Gross margin decreased to $4.5 million (9% of revenue) from the year-ago period’s level of $8.1 million (14% of revenues), primarily due to a decrease in sales volumes in DOEM, fuel storage and light- and heavy-duty OEM businesses.
Independent Aftermarket (IAM): Net sales of the segment totaled $28.3 million compared with $25.9 million in the year-ago period. The metric surpassed our estimate of $24.6 million. A rise in sales in North America, Western Europe and South America resulted in the outperformance. The IAM segment reported an operating profit of $2 million and beat our forecast of $0.5 million.
In the reported quarter, gross margin rose $2 million to $7.2 million, representing 25% of revenues. The company’s gross margin was $5.2 million (20% of revenues) in the first quarter of 2023. A favorable sales mix and high volumes sales led to an increase in margins.
Financials
Westport had cash and cash equivalents (including restricted cash) of $43.9 million as of Mar 31, 2024, down from $54.85 million at the end of 2023. Long-term debt decreased to $30.36 million at the end of first-quarter 2024 from $30.96 million as of Dec 31, 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -27.33% due to these changes.
VGM Scores
Currently, Westport has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Westport has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Westport Fuel Systems Inc. (WPRT) : Free Stock Analysis Report
