Westport Fuel Systems: Getting Better

Westport Fuel Systems Inc. (WPRT) announced first quarter ended March 31, 2016 total revenue of $56.1 million, down 11.4 percent year-over-year from $63.3 million during the same period last year.

Westport declared first quarter of 2016 net loss of $6.5 million or $0.36 of loss per diluted share compared to a net loss of $11.9 million or $0.62 of loss per diluted share in first quarter of 2015.

The global natural gas fuel driven engines manufacturer reported continued year-over-year decline in its top line primarily due to weaker revenue contribution from the company’s FSS Automotive segment that was poorly affected by weaker Compressor, OEM and DOEM sales volumes due to the effect of weaker energy prices on global consumer demand in its key markets, particularly in Europe and North America.

Focusing on financials

Westport is strategically improving its year-over-year financial position by uniquely transforming the well-planned R&D expenditures to yearly profits which are growing both consistently and significantly.
The net income from operations have also transformed from being negative earlier to somewhat positive as of now and year-till-date 2016 that signifies robustness of the company’s overall operations focused on driving sustainable long-term growth while delivering attractive shareholder returns.

The attractive financial discipline of Westport includes strong balance sheet, superior merger synergies and delivering impressive cost efficiencies, keen on growing cash and profitability while driving well-planned R&D investments.

Further, Westport is deeply involved in serving all the key market segments including the automotive segment through offering innovative commercial and passenger transportation products (Aftermarket & OEM), the industrial segment through providing technologically-superior Auxiliary power units (APUs) along with advanced stationary equipment and industrial mobile products, strategic technology and corporate investments in corporate G&A, R&D and HPDI development while also focused on delivering an attractive joint venture between Westport Inc. and Cummins Inc. targeted towards accelerating key investments in medium and heavy-duty engine marketplaces for buses, trucks, refuse trucks and tractors.

The extremely well-planned investments being undertaken by the global gaseous engines manufacturing company is primarily a result of its solid financial position and robust innovation delivering capabilities that is expected to drive sustainable long-term company growth while delivering attractive shareholder returns.

Product development will drive growth

Going forward, Westport seems to be a high-value delivering stock being supported by an experienced leadership focused on delivering attractive value proposition through new solutions for dealing with worldwide environmental challenges, industry-leading technology position and a wide range of big brands and products for varied applications or markets. The company also has well-established priorities for 2016 that include planned portfolio assessment, highly positive and profitable cash flows, unique alignment of operational expenditures with revenue, strategic launch of HPDI 2.0 while delivering superior integration, cost efficiency and improvements.

Moving ahead, Westport targets on developing a highly streamlined portfolio with attractive resources and capital focused on driving healthy business results that is ought to drive sustainable long-term company growth and profitability. Moreover, the company is uniquely following a financially disciplined investment program to further fortify its balance sheet, deliver superior merger synergies and cost efficiencies, keen focus on delivering attractive cash and overall profitability while following a disciplined R&D investment plan.

The innovative gaseous engines manufacturing company is providing attractive technology solutions for dealing with international environmental challenges and successfully following the regulatory standards. HPDI and Westport’s other key fuel system techniques drive minimized GHG emissions. Further, Westport is believed to have an industry-leading position in terms of filing technology patents with more than 600 patents for advanced LPG/LNG/CNG systems and components globally. The company also has solid intellectual property standing and prolific growth with superior commercialization initiatives focused on expanding the company’s product pipeline all through the industry.

The continued cost-optimization efforts of Westport focused on sustaining a solid financial position to uniquely target attractive and innovative engine development capabilities of Westport is expected to deliver continued long-term industry-leading returns.

Conclusion

Overall, the investors are advised to “Hold” their position in Westport Fuel Systems Inc. considering the company’s significant long-term growth prospects but, currently weaker financial position with significant total debt of $81.50 million and weaker total cash position of $71.22 million only, restricting the company to continue with its daily operations profitably. The profit margin of -69.30% is disappointing and indicates no profit but loss. The PEG ratio of -0.08 appears misguiding and depicts no near-term company growth but decline.
Published on Aug 29, 2016
By Yaggyaseni Mittra

Copyrighted 2016. Content published with author's permission.

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