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Westport Reports Smaller Financial Loss

May 12, 2015

By Evan Lockridge

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The Cummins Westport ISX12 G natural gas engine. Photo: Westport
The Cummins Westport ISX12 G natural gas engine. Photo: Westport

Natural gas engine provider Westport Innovations Inc. said last week it thinned financial losses in the second quarter of the year despite a 30% drop in revenue.

Its net loss of $17.2 million was down 28% from the first quarter of 2014, or a net loss per share of 27 cents in the most recent quarter, compared to 38 cents a year earlier for the Canadian company.

All financial figures are in U.S. dollars.

Revenue declined to $28 million from $39.9 million a year earlier.

The company says despite headwinds from volatile oil prices and economic turbulence in many of Westport's key markets, the global market for natural gas vehicles demonstrated resilience, with continued expansion in several markets in the first quarter.

"The swift change in global energy pricing caused some short-term disruption to our business plan at the end of 2014, but this quarter demonstrates that we have successfully reset our plans and we are back on track," said David Demers, CEO. "Our strong and diversified product portfolio and position in key global markets has meant we can deliver improvements to the bottom line at the same time as we improve our market position and advance our technology leadership with aggressive product development initiatives."

He said Westport’s consolidated business demonstrated a dramatic improvement in cash used in operations compared to the average in 2014.

“We achieved this result through our focus on key products and key markets, and improved operational efficiencies across the business, while continuing investment in key strategic programs including high pressure direct injection 2.0 products,” Demers said.

Westport said first quarter revenue was in line with its 2015 expectations and up 2% over the final quarter of last year. The company reiterated its revenue outlook and expects consolidated revenue to be between $110 million and $125 million for the year.

As in the past, it did not provide financial forecasts for individual joint ventures, including the one with Cummins Inc. However, it did release those earnings for the first quarter.

Cummins Westport Inc. had revenue of $73 million on 2,278 engine units for the quarter, a decrease of 9% in revenue over the same period last year.

It said revenues would have been similar on a year-over-year basis, however, a delay for a shipment to an Asian customer into the second quarter of 2015 affected the first quarter results.

In North America, CWI unit volume increased by 3% year-over-year, driven by strong growth in refuse applications, a 51% increase over the same period in 2014.

CWI's net income attributable to Westport for the quarter was $5.9 million compared with a loss of $800,000 in the prior.

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