Westport Fuel Systems Inc. WPRT incurred a loss of 22 cents per share in the third quarter of 2024, narrower than the Zacks Consensus Estimate of a loss of 41 cents. The company had incurred a loss of 68 cents in the year-ago period.

WPRT registered consolidated revenues of $66.2 million, missing the Zacks Consensus Estimate of $67 million. The top line also fell from $77.4 million generated in the corresponding quarter of 2023. The company incurred an adjusted EBITDA loss of $0.8 million compared with a loss of $3 million recorded in the year-ago period.

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Westport Fuel Systems Inc. Price, Consensus and EPS Surprise

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Segmental Takeaways

From the third quarter of 2024, Westport has started reporting its results under five reportable segments: Cespira, Light-Duty, High-Pressure Controls and Systems, Heavy-Duty OEM and Corporate. Cespira is Westport’s HPDI joint venture with Volvo Group.

Cespira: The segment reported net sales of $16.2 million and incurred an operating loss of $5.3 million in the third quarter of 2024.

Light-Duty: Net sales of the segment totaled $61.5 million, which increased from $60.2 million in the third quarter of 2023 and surpassed our estimate of $53.2 billion. The upside was mainly due to higher sales in light-duty OEM and IAM businesses.

The segment reported an operating income of $2.4 million against the year-ago quarter’s operating loss of $3 million. The metric surpassed our estimate of $1.9 million. Gross profit rose to $13.9 million (23% of revenues) from the year-ago period’s $12 million (20% of revenues), primarily due to an increase in sales volumes, a change in sales mix with higher sales to European customers and lower sales in developing regions.

High-Pressure Controls and Systems: Net sales of the segment totaled $1.6 million compared with $3.7 million in the year-ago period. The figure missed our estimate of $3 million. A slowdown in building hydrogen infrastructure has resulted in slower adoption of hydrogen-powered solutions in automotive and industrial sectors, which resulted in a year-over-year decline. The segment incurred an operating loss of $1.2 million compared with the operating loss of $0.4 million reported in the corresponding quarter of 2023. The loss was narrower than our estimate of a loss of $1.3 million.

In the reported quarter, gross profit fell $0.6 million to $0.4 million, representing 25% of revenues due to lower sales volume. The company’s gross profit was $1 million or 27% of revenues in the third quarter of 2023.

Heavy-Duty OEM: Net sales of the segment, which includes revenues from the HPDI business from Jan. 1, 2024, to June 3, 2024, totaled $3.1 million. The company reported $13.5 million in the year-ago quarter. The metric missed our estimate of $11.4 million. The year-over-year decline resulted from the transition of this business to Cespira and the consequent change in accounting method. The segment reported an operating income of $0.9 million against the loss of $3.7 million reported in the corresponding quarter of 2023. We estimated an operating loss of $4.2 million.

Gross profit totaled $0.2 million (6% of revenues) compared with $0.2 million (1% of revenues) in the third quarter of 2023.

Corporate: The segment reported an operating loss of $1 million compared with an operating loss of $5 million reported in the year-ago period. The operating loss was narrower than our estimate of a loss of $3.2 million.