Westport Innovations Inc.’s WPRT share price lost 6.1% value to $4.03 on Jul 30 after the company reported loss in the second quarter of 2015. Loss per share in the reported quarter contracted to 27 cents from 42 cents in the prior-year quarter. However, the loss was wider than the Zacks Consensus Estimate of a loss of 26 cents.
Net loss on a reported basis amounted to $20.5 million or 32 cents per share, narrower than $35.4 million or 56 cents per share recorded in the second quarter of 2014.
Consolidated revenue for Westport Operations and Corporate & Technology Investments totaled $27.8 million in the second quarter, down 26.6% year over year owing to unfavorable foreign currency translation and economic weakness in certain European and Asian markets. Moreover, revenues missed the Zacks Consensus Estimate of $29 million.
Consolidated gross margin stood at $9.7 million (34.9% of sales) in second-quarter 2015, compared with $13.6 million (35.9% of sales) in the year-ago quarter.
Consolidated adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) amounted to a negative $7.7 million, narrower than $16.9 million in the second quarter of 2014. The improvement can be attributed to improvement in cost structure, prioritization of investment programs, higher Cummins Westport net income and synergies from the completion of a major HPDI engine program.
Segment Details
Westport Operations recorded a 31.5% decrease in revenues to $24.6 million. Operating loss in the segment widened to $1.4 million in the reported quarter from $0.4 million in the second quarter of 2014.
Corporate and Technology Investments reported a 52.4% plunge in revenues to $3.2 million. Operating loss amounted to $14.7 million compared with a loss of $21 million recorded a year ago.
The Cummins Westport Inc. (“CWI”) joint venture reported a 17% increase in revenues to $93.1 million, mainly on strong performance in North American segments of. Operating income at Cummins Westport was $11.6 million compared with $0.4 million in the prior-year quarter. Net income attributable to Westport was $3.4 million compared with $0.4 million in the prior-year quarter.
The Weichai Westport Inc. (“WWI”) joint venture reported a 68.5% plunge in revenues to $41.9 million. Net income attributable to Westport Innovations was $0.1 million compared with $0.7 million in the prior-year quarter.
Financial Position
Westport Innovations had cash and cash equivalents of $59.9 million as of Jun 30, 2015, down from $93.3 million as of Dec 31, 2014. Long-term debt was $71.7 million as of Jun 30, 2015, down from $78.5 million as of Dec 31, 2014.
For the six months ended Jun 30, 2015, Westport Innovations’ cash used in operations was $39.2 million compared with $52 million in the first half of 2014.
Outlook
Westport Innovations forecasts consolidated revenue from the Westport Operations and Corporate & Technology Investments segments in the $110–$125 million range for 2015.
Stocks to Consider
Westport Innovations currently carries a Zacks Rank #4 (Sell). Better-ranked automobile stocks include Ford Motor Co. F, Tesla Motors, Inc. TSLA and PACCAR Inc. PCAR. All the stocks carry a Zacks Rank #2 (Buy).
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