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Westport (WPRT) Q1 Loss Wider Than Expected, Revenues Down

Westport Fuel Systems Inc. WPRT reported loss per share of 11 cents in first-quarter 2020, wider than the Zacks Consensus Estimate of a loss of 5 cents. The figure also comes in wider than the year-ago quarter’s loss of 2 cents a share. Lower revenues in the OEM, IAM and CWI segments resulted in this underperformance.

Net loss from continuing operations in the reported quarter was $15.3 million, as against the net loss of $3 million posted in first-quarter 2019.

Westport logged consolidated revenues of $67.2 million in the first quarter, down 8% year over year. However, revenues surpassed the Zacks Consensus Estimate of $59 million.

During the first quarter, consolidated gross margin decreased to $4.3 million from the prior year’s $17.2 million. Pretax loss amounted to $3.6 million compared with the prior-year quarter’s pretax profit of $7.3 million.

Westport Fuel Systems Inc. Price, Consensus and EPS Surprise

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

Operational Results

Original Equipment Manufacturer Segment (OEM): Net sales of the segment decreased 12.3% year over year to $34.2 million in the reported quarter mainly due to the coronavirus crisis-related shutdowns, contractual price reductions to its HPDI launch partner, and lower light-duty OEM sales to Russian and German OEMs. The segment’s operating loss flared upto $14.2 million from the loss of $2.7 million incurred in first-quarter 2019.

Independent Aftermarket Segment (IAM): Net sales of the segment decreased 3.5% year over year to $34.2 million in the reported quarter on the pandemic-induced supply-chain disruptions. The segment’s operating income rose to $4.8 million from the prior-year quarter’s $2.2 million.

CWI Joint Venture (50%): This segment’s revenues totaled $38.3million, down from the year-ago quarter’s $46.1 million on higher sales volume. Operating income was $6.7 million, down from the first-quarter 2019 level of $9.9 million primarily due to lower revenues.

Corporate Business Segment: Operating loss of the segment amounted to $10.2 million, wider than the operating loss of $8.3 million incurred in year-earlier period. The segment’s depreciation and amortization expenses came in at $0.1million, flat year over year.

Financial Position

Westport had cash and cash equivalents of $39 million as of Mar 31, 2020, down from $46 million as of Dec 31, 2019. Total debt rose to $50 million in the reported quarter from $49 million as of Dec 31, 2019.

Zacks Rank & Stocks to Consider

Westport currently carries a Zacks Rank #4 (Sell).Shares of the company have depreciated 40.9%, year to date, compared with the industry’s decline of 9.9%.

Some better-ranked stocks in the same sector are Tesla, Inc. TSLA, Niu Technologies NIU and Halfords Group Plc HLFDY, each carrying a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Tesla have appreciated 106.6%, year to date, compared with its industry’s rise of 30.3%.

Shares of Niu have gained 37.7%, year to date, as against the industry’s decline of 9.9%.

Shares of Halfords have rallied 44.2%, year to date, as against its industry’s decline of 9.9%.

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