Released late last week, Westport's third-quarter 2014 financials showed softness year-over-year, with non-joint-venture revenue totaling $25.3 million – a 46% decrease from third-quarter 2013's $46.5 million. For the nine months ended Sept. 30, 2014, revenue totaled $103.2 million, compared with $111.4 million for the same nine-month period last year – a decrease of only 7%.
The natural gas engine and systems specialist cited a few company-specific explanations for the quarterly numbers, such as ‘geopolitical instability in key growth markets’ and the timing of revenue related to its service operations. But Westport also noted that its third-quarter performance was likely affected by a recent trend that all players in the alt-fuel vehicle sector are facing: a substantial drop in gasoline and diesel prices, which is affecting market adoption of natural gas technologies.
‘It's no secret that markets are not evolving as rapidly as some predicted,’ said David Demers, Westport's CEO.
The company is, therefore, in the midst of an effort to ‘match investments and expenses with the pace of market adoption.’
‘Westport has taken immediate actions to right-size the business structure and reduce expenses through activities including staff reductions and deferral of non-core development programs,’ the company said in a release.
‘Executives, seeing the long-term value in Westport, accepted salary reductions in exchange for a grant of restricted share units,’ the release states.
The company, which NGT News had yet to reach as of press time, did not specify which executives' salaries were reduced or by how much, nor describe the extent of the company's staff reductions. Westport did note that its efforts to reduce expenses will save the company more than $13 million next year.
