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WABCO Holdings Inc. (WBC - Snapshot Report) posted a 23.5% increase in earnings per share, bringing the figure to $1.26 in the third quarter of 2013 from $1.02 in the corresponding quarter last year. Further, profits surpassed the Zacks Consensus Estimate of $1.22.

In absolute terms, profits increased 19.9% to $79.5 million from $66.3 million in the year-ago quarter. Reported income, including non-recurring items, amounted to $80 million or $1.26 per share, up from $77.5 million or $1.19 per share in the third quarter of 2012.

Revenues for the quarter surged 15.1% to $677.1 million from $588.3 million in the year-ago quarter. Revenues were also ahead of the Zacks Consensus Estimate of $663 million.

The year-over-year increase in revenues was due to record high aftermarket sales in the quarter.

Operating income increased to $89.5 million or 13.2% of net sales from $76.4 million or 13.0% in the third quarter of 2012.

Financial Position

WABCO had cash and cash equivalents of $187.5 million as of Sep 30, 2013, up from $175 million as of Dec 31, 2012. The company had no long-term debt at the end of Sep 2013.

For the third quarter of 2013, the company’s operating cash flow declined to $92 million from $112.6 million in the prior-year quarter.

Outlook

For 2013, WABCO expects annual sales (in local currencies) to increase between 7.5% and 8.5%. Operating margin is projected in the range of 13.2%–13.4%. This will result in operating earnings of $4.90 to $5.00 per share.

Our Take

WABCO is the world's leading providers of electronic braking, stability, suspension and transmission control systems for heavy duty commercial vehicles. Currently, it retains a Zacks Rank #2 (Buy).

Some other stocks that are performing well in the industry where WABCO operates include Denso Corp. , Tower International, Inc. (TOWR - Snapshot Report) and Gentex Corp. (GNTX - Snapshot Report). All these companies carry a Zacks Rank #1 (Strong Buy).

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