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Westinghouse Air Brake (WAB) Q3 Earnings Meet, Rise Y/Y
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Westinghouse Air Brake Technologies Corporation (WAB - Free Report) (operating as Wabtec Corporation) reported third-quarter 2018 earnings (excluding 4 cents from non-recurring items) of 95 cents per share, in line with the Zacks Consensus Estimate. But the bottom line improved around 8% year over year.
Total sales increased 12.5% year over year to $1,077.8 million, surpassing the consensus mark of $986.3 million.
Total operating expenses in the reported quarter increased 16.7% to $176.83 million, primarily due to a 24.2% rise in selling, general and administrative expenses. Also, operating ratio (operating expenses as a percentage of revenues) deteriorated to 16.4% from 15.8% in the prior-year period.
Westinghouse Air Brake Technologies Corporation Price, Consensus and EPS Surprise
Net sales in the Transit segment increased 11% to $686.23 million driven, by organic sales growth and sales from acquisitions. However, income from operations in the segment was $60.74 million, up 28%. As a result, the segmental operating margin (income from operations as a percentage of sales) increased to 8.9% from 7.7% in the year-ago quarter.
Freight net sales rose 15% to $391.58 million, backed by organic sales growth and sales from acquisitions. Meanwhile, income from operations was $79.42 million, up 29%. Also, the operating margin improved to 20.3% from 18.1% a year ago.
Liquidity
As of Sep 30, this Zacks Rank #3 (Hold) company had $411.38 million in cash and cash equivalents compared with $233.4 million at the end of 2017. Long-term debt at the quarter-end was $3.82 billion compared with $1.82 billion at 2017 end. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
2018 Outlook
The company now anticipates 2018 revenues to be $4.35 billion, higher than the expectation of $4.2 billion, issued during second-quarter 2018 results. Additionally, earnings (excluding estimated costs of the proposed merger with GE Transportation and certain other items) are still predicted to be $3.85 per share in the year. The Zacks Consensus Estimate for 2018 earnings per share stands at $3.89 on revenues of $4.25 billion. Adjusted operating margin is estimated to be roughly 13%, lower than 13.5%, projected earlier. Meanwhile, cash flow from operations is anticipated to be $200 million in the current year.
Upcoming Releases
Investors interested in the broader Zacks Transportation sector are keenly awaiting third-quarter earnings reports from key players, namely Expeditors International of Washington, Inc. (EXPD - Free Report) , Triton International Limited and Air Lease Corporation (AL - Free Report) . While Triton International will release third-quarter results on Nov 2, Expeditors and Air Lease will announce the same on Nov 6 and Nov 8, respectively.
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Westinghouse Air Brake (WAB) Q3 Earnings Meet, Rise Y/Y
Westinghouse Air Brake Technologies Corporation (WAB - Free Report) (operating as Wabtec Corporation) reported third-quarter 2018 earnings (excluding 4 cents from non-recurring items) of 95 cents per share, in line with the Zacks Consensus Estimate. But the bottom line improved around 8% year over year.
Total sales increased 12.5% year over year to $1,077.8 million, surpassing the consensus mark of $986.3 million.
Total operating expenses in the reported quarter increased 16.7% to $176.83 million, primarily due to a 24.2% rise in selling, general and administrative expenses. Also, operating ratio (operating expenses as a percentage of revenues) deteriorated to 16.4% from 15.8% in the prior-year period.
Westinghouse Air Brake Technologies Corporation Price, Consensus and EPS Surprise
Westinghouse Air Brake Technologies Corporation Price, Consensus and EPS Surprise | Westinghouse Air Brake Technologies Corporation Quote
Segmental Performance
Net sales in the Transit segment increased 11% to $686.23 million driven, by organic sales growth and sales from acquisitions. However, income from operations in the segment was $60.74 million, up 28%. As a result, the segmental operating margin (income from operations as a percentage of sales) increased to 8.9% from 7.7% in the year-ago quarter.
Freight net sales rose 15% to $391.58 million, backed by organic sales growth and sales from acquisitions. Meanwhile, income from operations was $79.42 million, up 29%. Also, the operating margin improved to 20.3% from 18.1% a year ago.
Liquidity
As of Sep 30, this Zacks Rank #3 (Hold) company had $411.38 million in cash and cash equivalents compared with $233.4 million at the end of 2017. Long-term debt at the quarter-end was $3.82 billion compared with $1.82 billion at 2017 end. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
2018 Outlook
The company now anticipates 2018 revenues to be $4.35 billion, higher than the expectation of $4.2 billion, issued during second-quarter 2018 results. Additionally, earnings (excluding estimated costs of the proposed merger with GE Transportation and certain other items) are still predicted to be $3.85 per share in the year. The Zacks Consensus Estimate for 2018 earnings per share stands at $3.89 on revenues of $4.25 billion. Adjusted operating margin is estimated to be roughly 13%, lower than 13.5%, projected earlier. Meanwhile, cash flow from operations is anticipated to be $200 million in the current year.
Upcoming Releases
Investors interested in the broader Zacks Transportation sector are keenly awaiting third-quarter earnings reports from key players, namely Expeditors International of Washington, Inc. (EXPD - Free Report) , Triton International Limited and Air Lease Corporation (AL - Free Report) . While Triton International will release third-quarter results on Nov 2, Expeditors and Air Lease will announce the same on Nov 6 and Nov 8, respectively.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>