A month has gone by since the last earnings report for Westport Innovations (WPRT). Shares have lost about 7.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Westport due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Westport Q2 Earnings Beat Estimates, Sales Decline Y/Y

Westport incurred a loss of 43 cents per share in the second quarter of 2024, narrower than the Zacks Consensus Estimate of a loss of 55 cents. The company had incurred a loss of 60 cents in the year-ago period. 

WPRT registered consolidated revenues of $83.4 million, missing the Zacks Consensus Estimate of $86 million. The top line also fell from $85 million generated in the corresponding quarter of 2023. The company delivered an adjusted EBITDA of negative $2 million compared with negative $4 million recorded in the year-ago period.

Segmental Takeaways

From the second quarter of 2024, Westport has started reporting its results under five reportable segments: HPDI JV, Light-Duty, High-Pressure Controls and Systems, Heavy-Duty OEM and Corporate.

HPDI JV: The segment reported net sales of $4.1 million and incurred an operating loss of $2 million in the second quarter of 2024. 

Light-Duty: Net sales of the segment totaled $69.5 million, down from $73.7 million in the second quarter of 2023. The downside was mainly due to a decrease in sales in delayed original equipment manufacturer (OEM), independent aftermarket and fuel storage businesses.

The segment reported an operating income of $3.3 million against the year-ago quarter’s operating loss of $1.8 million. Gross profit increased to $15.1 million (22% of revenues) from the year-ago period’s $12.7 million (17% of revenues), primarily due to a change in sales mix.

High-Pressure Controls and Systems: Net sales of the segment totaled $3.4 million compared with $2.8 million in the year-ago period. Increased sales volumes in product and service revenues lead to a year-over-year rise. The segment incurred an operating loss of $0.9 million compared with the operating loss of $0.6 million reported in the corresponding quarter of 2023.

In the reported quarter, gross profit rose $0.1 million to $0.7 million, representing 21% of revenues. The company’s gross profit was $0.6 million or 21% of revenues in the second quarter of 2023. 

Heavy-Duty OEM: Net sales of the segment totaled $10.5 million compared with $8.5 million in the year-ago period. An increase in product and engineering sales when the company wholly owned the HPDI business led to a year-over-year rise. The segment incurred an operating loss of $2.3 million compared with the loss of $3.3 million reported in the corresponding quarter of 2023.

Gross profit increased to $1.3 million (12% of revenues) compared with $1.1 million (13% of revenues) in the second quarter of 2023. 

Corporate: The segment reported an operating loss of $5.4 million compared with an operating loss of $4.5 million reported in the year-ago period.