Westport Fuel Systems (WPRT) Q1 Loss Narrower Than Expected

Westport Fuel Systems Inc.’s (NASDAQ:WPRT) first-quarter 2017 loss from continuing operations came in at 12 cents per share, narrower than the year-ago loss of 38 cents. Moreover, the adjusted loss was also narrower than the Zacks Consensus Estimate of a loss of 15 cents.

Total net loss amounted to $12.8 million. The reported net loss for first-quarter 2016 was $24.5 million.

Westport Fuel Systems logged revenues of $60 million in the reported quarter, up 150% year over year. The growth was primarily driven by the addition of Fuel Systems’ revenues. However, the top line missed the Zacks Consensus Estimate of $78 million.

Consolidated gross margin increased to $17.5 million (29.2% of sales) in the reported quarter from $6.4 million (26.7% of sales) recorded in the year-ago quarter. The improvement in gross margin was mainly due to the merger with Fuel Systems as well as improved operating performance.

Consolidated adjusted EBITDA amounted to a negative $4.1 million, compared with a negative $11.9 million in the prior-year quarter.

Westport Fuel Systems Inc Price, Consensus and EPS Surprise

Segment Details

Automotive Business Unit recorded a 142.8% increase in revenues to $56.3 million in the quarter due to lower Euro during the quarter. Gross margin increased to $13.8 million (25%) from $5.6 million (24%) in the prior-year quarter.

Corporate and Technology Investments Business Unit revenues were $3.7 million in the quarter, compared to $0.8 million in the year-ago period.

The CWI joint venture recorded an 8.7% increase in revenues to $70.7 million, mainly owing to the increase of the natural gas engine population in service. CWI operating income attributable to Westport Fuel Systems was $1.8 million in the reported quarter up from the prior-year figure of $0.5 million due to improved shipments and higher gross margins.

Financial Position

Westport Fuel Systems had cash and cash equivalents of $47.3 million as of Mar 31, 2017, down from $60.1 million as of Mar 31, 2016. Long-term debt was $78.4 million as of Mar 31, 2017, up from $65.4 million as of Mar 31, 2016.

In first-quarter 2017, Westport Fuel Systems’ cash used in operations was $16.8 million, compared with $23.1 million used in the year-ago period.

The company has not provided any guidance for revenues or earnings. It is in the final development stage of the launch of commercial components of HPDI 2.0.

Price Performance

Westport Fuel Systems has outperformed the Zacks categorized Auto/Truck Replacement Parts industry in the last three months. During this period, the company’s share rallied 14.4%, while the industry witnessed a 4.1% increase.

Zacks Rank & Key Picks

Westport Fuel Systems currently carries a Zacks Rank #3 (Hold).

Some better-ranked automobile stocks include Allison Transmission Holdings, Inc. (NYSE:ALSN) , Cummins Inc. (NYSE:CMI) and Dana Inc. (NYSE:DAN) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission Holdings has an expected long-term growth of 11%.

Cummins has an expected long-term growth of 9.8%.

Dana has an expected long-term growth of 3%.

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