Westport Posts 2Q Loss, But Ships More Nat-Gas Truck Engines in North America
Westport Innovations reported a second-quarter loss but said it shipped more natural-gas engines for the North American trucking market through its joint venture with Cummins Inc.
Westport’s net loss widened to $35.4 million from $33.9 million a year earlier. On a per share basis, however, the company’s loss narrowed to 56 cents from 61 cents.
Quarterly revenue climbed 15% to $40 million, the Vancouver, British Columbia-based company reported.
Westport also said it achieved positive adjusted earnings before tax, depreciation and amortization of $1 million, compared with a loss of $8.9 million a year earlier.
“I’m very pleased that we’re able to deliver this milestone ahead of schedule, and I now want to expand our guidance by confirming that we intend to achieve full-year positive adjusted EBITDA from operations this year in 2014,” CEO David Demers said on the company’s July 31 earnings call.
The Cummins Westport Inc. joint venture shipped 2,479 engines during the quarter, down from 2,716 units a year earlier, primarily due to the timing of international orders, Westport said.
CWI’s engine shipments declined to 2,479 units from 2,716 units a year earlier, primarily due to the timing of international orders, Westport said.
Shipments in North America for trucking applications, however, rose 22% due to “strong” demand for the 11.9-liter ISX12 G natural-gas engine, Chief Financial Officer Ashoka Achuthan said on the call.
CWI began limited production of the ISX12 G in April 2013 and entered full production that August.
In the first half of 2014, CWI engine shipments in North America climbed 33% year-over-year, led by a 79% jump in truck applications resulting from the ISX12 G launch.
“The ISX12 G has been performing to expectations and has been well-received,” the company said. “Demand for the ISX12 G continues to be strong as a number of fleets have recently announced their plans to integrate natural-gas trucks into their fleet mix.”
Quarterly revenue for CWI edged up 2% to $79.2 million, but the joint venture’s net income attributable to Westport fell to about $400,000, compared with $3.3 million income in the prior-year period.
That drop reflected $10.2 million in warranty-related adjustments during the quarter — primarily tied to the joint venture’s 8.9-liter ISL G engine — which reduced earnings per share by 5 cents, Achuthan said. “The [CWI] team has made significant progress in identifying and resolving these warranty issues, and we expect gross margins and net income to improve significantly in upcoming quarters.”
Revenue for Westport’s on-highway systems business unit jumped 57% to $11.6 million, led by sales of products such as its Westport Ice Pack LNG tank systems and Westport Wing Power Systems for Ford vehicles.
Meanwhile, quarterly revenue for Westport’s joint venture with Chinese engine-maker Weichai Power Co. fell 13% to $133.1 million.
Engine shipments for Weichai Westport Inc. declined to 11,071 compared with 12,410 a year earlier. Westport attributed that downturn to softer economic conditions and higher natural-gas prices in China.
Earlier this year, WWI began shipping a new version of its 12-liter WP12 engine with Westport’s high-pressure, direct-injection technology, complementing the joint venture’s existing lineup of spark-ignited natural-gas products.
