Westport (WPRT) Q4 Earnings Breakeven, Sales Beat Estimates

Westport Fuel Systems Inc. (NASDAQ:WPRT) reported break-even earnings per share in fourth-quarter 2019, as against the Zacks Consensus Estimate of a loss of a penny. The metric also compared favourably with the year-ago quarter’s loss of 8 cents a share. Higher revenues and lower operating expenses led to this outperformance.

Net income from continuing operations in the reported quarter was $0.7 million, as against net loss of $10.4 million posted in fourth-quarter 2018.

Westport logged consolidated revenues of $74.3 million in the fourth quarter, up 23% year over year, mainly on strength in its transportation businesses and higher HPDI revenues. Moreover, the company’s revenues surpassed the Zacks Consensus Estimate of $71 million.

During the reported quarter, consolidated gross margin increased to $13.8 million from the prior year’s $12.3 million. Adjusted EBITDA amounted to $3.6 million compared with the prior-year quarter’s $0.2 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-eps-surprise-chart | Westport Fuel Systems Inc. Quote

Operational Results

Transportation Business Segment: Net sales of the segment increased 23% year over year to $74.3 million in the reported quarter on solid revenues from the OEM business, mainly driven by higher HPDI 2.0 product sales. The segment’s gross margin rose to $13.8 million from $12.3 million in fourth-quarter 2018, aided by higher revenues during the current quarter.

CWI Joint Venture: This segment’s revenues totaled $102.5 million, up from the year-ago quarter’s $94.1 million on higher sales volume. Gross margin was $28.3 million, up from the fourth-quarter 2018 level of $21 million owing to higher revenues and lower warranty expense.

Corporate Business Segment: Corporate R&D expenses slumped 150% year over year from the $0.2 million recorded in the fourth quarter of 2018. The segment’s SG&A expenses came in at $3.8 million, down from the fourth-quarter 2018 level of $6.9 million, mainly owing to a reduction in legal cost for the Securities and Exchange Commission (SEC) investigation.

Financial Position

Westport had cash and cash equivalents of $46 million as of Dec 31, 2019, down from $61.1 million as of Dec 31, 2018. Long-term debt declined to $48.9 million in the reported quarter from $55.3 million as of Dec 31, 2018. The debt-to-capital ratio stands at 35.36%, as of Dec 31, 2019.

For the year ended Dec 31, 2019, the company’s net cash used in operating activities of continuing operations was $15.7 million compared with $27.4 million as of Dec 31, 2018.

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the same sector are Fox Factory Holding Corp. (NASDAQ:FOXF) , Blue Bird Corp. (NASDAQ:BLBD) and Polaris Industries (NYSE:PII) . While Fox Factory carries a Zacks Rank #1 (Strong Buy), Blue Bird and Polaris carry a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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