Westport Posts Q1 Loss
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Westport Fuel Systems Inc. shifted to the red from the black in the first three months of 2023 as the absence of income from the 2022 sale of its share in a natural gas truck engine joint venture with industry heavyweight Cummins Inc. weighed on the Canadian company’s bottom line, it said May 9.
Vancouver-headquartered Westport posted a net loss of $10.6 million, or 6 cents per diluted share, in the first quarter of 2023 after turning in a profit of $7.7 million, 4 cents, in the same quarter last year, it said.
The decrease in earnings was driven by the loss of equity income from the sale of Westport’s interest in the 20-year Cummins Westport Inc. joint venture, including a $19.1 million gain recorded in the first quarter of 2022, it said.
However, Westport beat consensus earnings estimates. Analysts had expected a loss of 8 cents per diluted share in the first quarter, according to Zacks Equity Research. The company also beat consensus revenue expectations of $78 million, Zacks said.
Westport’s revenue increased 7% to $82.2 million in the first three months of 2023 from $76.5 million in the year-ago period, driven by an increase of $4.5 million or 9% in its sales to original equipment manufacturers.
“Operationally our businesses performed well, despite continued challenges related to chip shortages and a slow return of customers who have lingering concerns from the high LNG prices seen in 2022,” CEO David Johnson said in a statement accompanying the results.
During the company’s earnings call May 9, Johnson said hydrogen-based fuel systems would be key to the company’s focus going forward. Westport’s hydrogen product line was not changing the fuel cycle for internal combustion truck engines, but would make them 10% more efficient, among other things, he said.
A multitude of original equipment manufacturers across North America and around the globe are focusing on hydrogen-powered trucking, Johnson said, as “it’s the only one for the longhaul” operators. But Johnson said Westport was ahead of most of its competitors because they were focusing on spark-ignited systems rather than direct injection — as Westport does with its High Pressure Direct Injection product line — to cut emissions.
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