Westport Shares Rise 7% Despite Wider-Than-Expected Q2 Loss

WPRT's Operating Loss Widens on Added Charges

The year-over-year top-line comparison reflected the planned end of the Heavy-Duty OEM transitional service agreement with Cespira after the second quarter of 2025, leaving that segment with no sales activity this quarter. Gross profit fell to $0.13 million from $0.84 million, while gross margin slipped to 5% from 7%.

Research and development expenses declined to $1.21 million from $1.57 million, while general and administrative expenses edged up to $4.17 million from $4.11 million. The operating loss widened to $7.21 million from $1.01 million. WPRT also recorded a $1.69 million foreign exchange loss, a $1.50 million warrant-liability fair-value loss and $1.09 million of financing transaction costs. Adjusted EBITDA was negative $6.27 million compared with negative $1.02 million.

Westport's Cespira Scales Across Revenue Streams

Cespira's product revenues rose 127% to $18.92 million, supported by significantly higher system volumes. Aftermarket revenues increased 108% to $5.52 million, while service revenues climbed 156% to $2.64 million as project milestones were achieved.

The mix and higher volumes materially improved profitability. Gross profit reached $3.81 million versus a gross loss of $1.93 million, and gross margin improved to 14% from negative 16%. Cespira's net loss narrowed 65% to $2.38 million as revenues scaled, material costs declined and labor efficiency improved.

WPRT's Controls Business Works Through Backlog

High-Pressure Controls revenues declined 6% year over year to $2.17 million, mainly because of lower sales volume. Gross profit was $0.13 million compared with $0.11 million, while gross margin improved to 5% from 4%. Westport ended the quarter with customer demand waiting to be fulfilled as output ramps at its Canadian and Chinese plants. 

The shortfall largely reflected the transfer of equipment from Europe, installation work, facility recertification and workforce training. The company characterized the first half as a transition period and expects the second half to focus on increasing production and filling backlog, with no additional major bottlenecks currently identified.

Westport's Liquidity Improves but Going-Concern Risk Remains

Cash and cash equivalents ended June were $23.95 million, down from $24.50 million as of March 31. Operating activities used $4.56 million of cash, while investing activities used $3.56 million, largely reflecting Cespira funding. Financing activities provided $8.30 million after the June equity and warrant transaction, partly offset by debt repayment.

Long-term debt, including the current portion, was $0.97 million. Despite the financing, Westport said projected cash resources are not sufficient to fund operations through the next 12 months, raising substantial doubt about its ability to continue as a going concern. The company is evaluating public-market, debt and other financing alternatives.

WPRT Targets 2027 Cespira Break-Even

The company reiterated its expectation that Cespira can reach break-even in 2027. Westport's second-quarter capital contribution to the joint venture fell to $3.51 million from $4.19 million a year earlier, and management expects funding needs to decline as volumes rise because the venture's core overhead base is already in place. 

The development pipeline adds another layer to the growth case. Volvo is funding Cespira's hydrogen HPDI development program, while on-road testing is underway and a European commercial launch is targeted before 2030. Separately, a significant Cespira engineering project is expected to finish in the fourth quarter of 2026 ahead of the planned Euro 7 product launch. 

WPRT currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Releases From Auto Space

General Motors Company GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.

Tesla, Inc. TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years. 

Genuine Parts Company GPC reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.

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