Westport Innovations Inc. WPRT is expected to report fourth-quarter 2015 results on Mar 29. In the last quarter, the company posted a negative earnings surprise of 132%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
Westport Innovations regularly launches new products to boost sales. The company also has strategic relationships with three of the world's top four engine producers. Moreover, Westport Innovations regularly makes investments and acquisitions related to technologies and businesses that complement or help in the commercialization of its products.
However, Westport Innovations has been incurring losses over the past several years, while its cash position is weakening. The company has also witnessed a declining revenue trend in the recent past. Revenues declined in the first three quarters of 2015 and are projected to decrease for the full year, thereby leading to expectations of a drop in the fourth quarter as well.
Earnings Whispers
Our proven model does not conclusively show that Westport Innovations is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Westport Innovations’ Earnings ESP is 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at a loss of 25 cents.
Zacks Rank: Westport Innovations carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
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.
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:
The Goodyear Tire & Rubber Company GT has an Earnings ESP of +5.71% and a Zacks Rank #2 (Buy). The company’s first-quarter 2016 financial results are scheduled for release on May 4.
Ford Motor Co F has an Earnings ESP of +6.82% and a Zacks Rank #2. The company will report first-quarter 2016 financial numbers on Apr 28.
Tenneco Inc. TEN has an Earnings ESP of +6.31% and a Zacks Rank #3. The company is expected to report first-quarter 2016 results on Apr 25.
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