Westport Innovations Inc. 's WPRT share price fell 9.8% to close at $3.03 on Nov 11 after the company reported a significant wider-than-expected loss in the third quarter of 2015. The stock plunged further, losing 15.2% in the three trading sessions following the announcement of results.
Loss per share in the reported quarter widened to 58 cents from 40 cents in the prior-year quarter. Also, the loss was much wider than the Zacks Consensus Estimate of a loss of 25 cents per share. Net loss amounted to $37.4 million, wider than $25.5 million in the third quarter of 2014.
Consolidated revenue for the Westport Operations and Corporate & Technology Investments segments was $22.3 million in the third quarter, down 11.8% year over year owing to unfavorable foreign currency translation and weakness in certain North American product lines. Moreover, the figure missed the Zacks Consensus Estimate of $27 million.
Consolidated gross margin stood at $1.3 million (5.8% of sales) in third-quarter 2015, compared with $8 million (31.5% of sales) in the year-ago quarter.
Consolidated adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) amounted to a negative $9.7 million, narrower than $22 million in the third quarter of 2014. The improvement can be attributed to cost reduction and higher net income from the Cummins Westport Inc. ("CWI") joint venture.
Westport Operations recorded a 14% decrease in revenues to $21.5 million. Operating loss in the segment widened to $7 million in the reported quarter from $6.4 million in the third quarter of 2014.
Corporate and Technology Investments reported a 300% surge in revenues to $0.8 million. Operating loss amounted to $18.3 million compared with a loss of $18.5 million recorded a year ago.
The CWI joint venture recorded a 16.7% increase in revenues to $82.4 million, mainly on strong performance in the core North American segments. Net income attributable to Westport Innovations was $3.5 million compared with $0.9 million in the prior-year quarter due to improved warranty expenses and stronger sales in the transit and refuse businesses.
The Weichai Westport Inc. ("WWI") joint venture reported an 81.3% plunge in revenues to $33.6 million. Net income attributable to Westport Innovations was $0.1 million compared with $1.2 million in the prior-year quarter.
Westport Innovations had cash and cash equivalents of $41.4 million as of Sep 30, 2015, down from $93.3 million as of Dec 31, 2014. Long-term debt was $66.2 million as of Sep 30, 2015, down from $78.5 million as of Dec 31, 2014.
For the nine months ended Sep 30, 2015, Westport Innovations' cash used in operations was $54.7 million compared with $83.4 million in the first nine months of 2014.
Westport Innovations projects consolidated revenue from the Westport Operations and Corporate & Technology Investments segments in the $110-$125 million range for 2015. The company hopes to achieve consolidated positive adjusted EBITDA by mid-2016.
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Westport Innovations currently carries a Zacks Rank #3 (Hold). Better-ranked automobile stocks include General Motors Co. GM , O'Reilly Automotive Inc. ORLY and Pep Boys - Manny, Moe & Jack PBY . All these stocks carry a Zacks Rank #2 (Buy).