Westport Set to Report

The financial results won’t matter as much as management’s message.

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The Motley Fool

One of Canada’s most, um, innovative companies, Westport Innovations (TSX:WPT,NASDAQ:WPRT) is set to announce quarterly results.

Judging by the consensus estimates tabled below, not much is expected out of Westport, at least from a financial standpoint.

Q1’13 EPS(e)

2013 EPS(e)

Q1’13 Revs(e)

2013 Revs(e)

-$0.51

-$1.65

$39MM

$186MM

Source:  Capital IQ/JP Morgan

Steep losses are expected to continue for this maker of natural gas-fired engines.  Therefore, lacklustre financial results aren’t likely to matter all that much.

If the financials don’t matter, what does?

Investors are likely to key on several more qualitative items.  An update on the state of natural-gas fueling infrastructure in the U.S. is huge.  The current lack of infrastructure is one of the primary hold- ups facing WPT’s technology.

In addition, the company needs to provide continued insight into the cost of their product and how it relates to the payback period that new adopters expect.  WPT spends a lot of effort trying to convince potential clients that the additional upfront cost of its engines is more than recouped over the life of the product through cheaper operating costs.  Investors will want to hear that this relationship is ideally improving (cost coming down), or at least holding firm.

Foolish Takeaway

With numbers like these, Westport is one of those companies you can’t really put a fundamental value on.  This is a business that has yet to hit its stride and to own it, you need to believe in the story.  Westport appears well-positioned at this point from a technological standpoint, but the longer it takes the industry to evolve, the more time competitors will have to catch-up.

Westport is a leader in an unproven industry.  Many of today’s best companies started out the same way and have gone on to make their shareholders billions (and billions, and billions) of dollars richer.  3 such companies are profiled in our special FREE report “3 U.S. Stocks Every Canadian Should Own”.  Simply click here and we’ll send you this report – absolutely FREE!

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Fool contributor Iain Butler does not own shares in any of the companies mentioned in this report at this time.  The Motley Fool owns shares in Westport Innovations. 

 

****Editor’s Note:  An earlier version of this report contained erroneous information that related to the date/time of Westport’s release.  We apologize for any confusion this may have caused.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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