Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Westport Fuel Systems Surged Today

By Lou Whiteman - May 10, 2019 at 11:02AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A Wall Street analyst says the company's clean fuel systems are gaining traction.

What happened

Shares of Westport Fuel Systems (WPRT 2.34%) climbed 16% on Friday morning after the manufacturer of clean fuel systems reported first-quarter results that came in ahead of expectations, and won an analyst upgrade as a result.

So what

On Thursday evening, Westport, which is focused on technology that allows trucks to run on natural gas, reported a first-quarter loss from continuing operations of $0.02 per share on revenue of $73.2 million, beating analyst expectations for a $0.04 per share loss on sales of $65.4 million. Transportation revenue was up 15% year over year and up 21% from the fourth quarter.

A hand draws a climbing stock chart.

Image source: Getty Images.

CEO David M. Johnson said the company's products are gaining traction as large transport users try to comply with regulations limiting emissions.

"Our diversity of commercially available products applicable to the full range of transportation applications and available in markets around the world are the key to our improving results," Johnson said. "Favorable macro-economic factors and stricter emissions regulations are driving OEM and consumer demand for our market-ready alternative fuel technologies."

The results prompted Lake Street analyst Robert Brown to upgrade shares to buy from hold. The analyst said that the strength of the quarter helps give him confidence that Westport's management transition has gone smoothly, and that the company is gaining a foothold in its key markets.

Now what

With the Friday jump, shares of Westport are now up nearly 50% year to date, but the stock still has a way to go to get back to levels hit last September after it announced a deal that was supposed to ease the company's expansion into China.

WPRT Chart

WPRT data by YCharts.

Commercial launch of Westport's HPDI 2.0 national gas technology in China is expected this year, which the company said should drive volume growth and help it reduce costs and improve margins.

Westport is moving in the right direction, but it is going to have to make good on the potential it sees in China for the momentum to continue. Investors will be watching the next few quarterly reports carefully.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Westport Fuel Systems Inc. Stock Quote
Westport Fuel Systems Inc.
$1.18 (2.34%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.