Markets

Will Westport (WPRT) Miss Estimates This Earnings Season? - Analyst Blog

Multiple stacks of coins
Credit: Shutterstock photo

Westport Innovations Inc. ( WPRT ) is expected to report fourth-quarter 2014 results on Feb 25. In the last quarter, it had posted a positive earnings surprise of 9.09%. Let's see how things are shaping up for this announcement.

Factors Influencing this Quarter

Westport faces soft economic conditions in Europe, which will adversely affect the upcoming results of the company. Westport expects revenues for 2014 to be in the range of $130-$140 million, down from $164 million recorded in 2013. Moreover, revenues decreased 7% in the first nine months. Thus, the fourth quarter results of the company may also decline year over year.

However, Westport is likely to benefit from the acquisition of Netherlands-based Prins Autogassystemen Holding B.V. in Dec 2014. This acquisition will expand the company's product portfolio, sales volume and strength in Europe, Asia and North America alongside providing it with new markets.

Earnings Whispers

Our proven model does not conclusively show that Westport is likely to beat earnings 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's Earnings ESP is -2.56% as the Most Accurate estimate stands at a loss of 40 cents while the Zacks Consensus Estimate is pegged at a loss of 39 cents.

Zacks Rank: Westport currently has a Zacks Rank #3 (Hold). Though a Zacks Rank #3 increases the predictive power of ESP, the company's ESP of -2.56% makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 and 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 in their next financial release:

Navistar International Corporation ( NAV ) has an Earnings ESP of +33.63% and a Zacks Rank #3. The company's first-quarter 2015 financial results are scheduled for release on Mar 4.

Sonic Automotive Inc. ( SAH ) has an Earnings ESP of +3.23% and a Zacks Rank #2 (Buy). It will release its fourth-quarter earnings results on Feb 24.

Magna International Inc. ( MGA ) has an Earnings ESP of +1.34% and a Zacks Rank #3. It will release its fourth-quarter earnings results on Feb 25.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

NAVISTAR INTL (NAV): Free Stock Analysis Report

MAGNA INTL CL A (MGA): Free Stock Analysis Report

SONIC AUTOMOTVE (SAH): Free Stock Analysis Report

WESTPORT INNOV (WPRT): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

WPRT MGA NAV SAH

Other Topics

Earnings Stocks

Latest Markets Videos