What Awaits Westport Innovations (WPRT) In Q2 Earnings?

Westport Innovations Inc. (NASDAQ:WPRT) is expected to report second-quarter 2016 results on Aug 3. In the last quarter, the company posted a negative earnings surprise of 24.14%. Let’s see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Westport Innovations is likely to beat estimates this quarter because it has the right combination of the two key components.

Zacks ESP: Earnings ESP for Westport Innovations is currently pegged at +9.09% as the Most Accurate estimate is pegged at a loss of 20 cents while the Zacks Consensus Estimate is of a loss of 22 cents.

Zacks Rank: Westport Innovations carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1, 2 or 3 have a significantly higher chance of beating earnings. 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.

The combination of Westport Innovations’ Zacks Rank #3 and positive ESP makes us reasonably confident of a positive surprise this season.

What is Driving the Better-than-Expected Results?

Westport Innovations 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 Innovations 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.

Stocks to Consider

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Metaldyne Performance Group Inc. (NYSE:MPG) has an Earnings ESP of +3.57% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Aug 4.

Magna International Inc. (NYSE:MGA) has an Earnings ESP of +0.75% and a Zacks Rank #3. The company’s second-quarter 2016 financial results are expected to release on Aug 5.

Cooper Tire & Rubber Co. (NYSE:CTB) has an Earnings ESP of +7.48% and a Zacks Rank #3. The company’s second-quarter 2016 results are expected to release on Aug 4.

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