OTTAWA, Feb 12 (Reuters) - Westport Innovations Inc WPT.TO WPRT.O shares rose 13 percent on Friday after the developer of natural gas-powered heavy truck engines reported a surge in sales that outpaced market expectations.
Revenue increased 24 percent to C$38.4 million ($36.6 million) in the “pivotal” third quarter, the company said after markets closed on Thursday. Westport’s net loss was pared to 21 Canadian cents a share from 28 Canadian cents a year ago.
On average, analysts had expected a loss of 25 Canadian cents a share and revenue of C$35.9 million, according to Thomson Reuters I/B/E/S.
Dundee Capital Markets analyst Ian Tharp said the results bettered his expectation for a loss of 26 Canadian cents a share and revenue of C$33 million.
Shares in the Vancouver-based company peaked at C$13.49 on the Toronto Stock Exchange on Friday before edging back to C$11.76, for a gain of 13 percent. Shares on Nasdaq added $1.47 to $12.63.
In the quarter, Westport recorded record sales from its partnership with Cummins Inc CMI.N, the world’s largest independent manufacturer of diesel engines, Tharp said.
In coming quarters, revenue may also get a lift from a series of partnerships. Those include a supply deal with Volvo AB VOLVb.ST and joint ventures with Weichai Power Co Ltd 000338.SZ, China’s biggest heavy duty engine manufacturer, and with Italy’s SIT Group that is called Juniper Engines.
“One of the main arguments against the switch to natural gas has been the incremental up-front cost of the engine,” Tharp said in a note.
“Westport has wrestled cost out of its engines ... (and) intends to reduce average selling prices to accelerate market penetration and maintain payback periods in the range of 12 to 18 months.”
$1=$1.05 Canadian Reporting by Susan Taylor; editing by Rob Wilson