Yahoo Finance Why Is Westport (WPRT) Down 14.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Westport Innovations (WPRT). Shares have lost about 14.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Westport due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Westport Incurs Wider-Than-Anticipated Loss in Q4
Westport incurred a loss of 81 cents per share in fourth-quarter 2023, wider than the Zacks Consensus Estimate of a loss of 62 cents per share. It registered consolidated revenues of $87.2 million in the quarter, beating the Zacks Consensus Estimate of $82 million. The top line also rose from $78 million generated in the corresponding quarter of 2022. The company delivered an adjusted EBITDA of negative $10 million in the quarter under review compared with negative $12.9 million recorded in the year-ago period.
Segmental Takeaways
Original Equipment Manufacturer (OEM): Net sales of the segment totaled $61.2 million, up from $47.8 million in the fourth quarter of 2022. The upside was mainly due to higher sales volumes in the light-duty OEM and electronics businesses. Additionally, increased engineering service revenues from the heavy-duty OEM business aided results. The metric also surpassed our estimate of $50.8 million.
The segment reported an operating loss of $11.7 million, narrower than a loss of $12.8 million incurred in the year-ago period and our forecast of $7.4 million. Gross margin increased to $0.8 million (1% of revenue) from the year-ago period’s level of negative $0.8 million (negative 2% of revenues), driven by increased revenues.
Independent Aftermarket (IAM): Net sales of the segment totaled $26 million compared with $30.2 million in the year-ago period. The metric also missed our estimate of $30.7 million. Lower sales volumes in Africa and South America hurt revenues. The IAM segment reported an operating profit of $1.9 million, up from $0.6 million generated in the year-ago period. Our forecast for operating income was $0.3 million.
In the quarter, gross margin rose $1.8 million to $7.2 million, representing 28% of revenues. This compares to $5.4 million (18% of revenues) in the fourth quarter of 2022. A favorable sales mix, reduced costs of electronic components and high volumes sales in Europe led to the increase in margins.
Financials
Westport had cash and cash equivalents (including restricted cash) of $54.8 million as of Dec 31, 2023, down from $86.2 million at the end of 2022. Long-term debt decreased to $30.9 million at the end of fourth-quarter 2023 from $32.2 million on Dec 31, 2022.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
The consensus estimate has shifted 6.52% due to these changes.
VGM Scores
Currently, Westport has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Westport has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Westport Fuel Systems Inc. (WPRT) : Free Stock Analysis Report
