We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Wabtec (WAB) Up 4.7% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for Westinghouse Air Brake Technologies (WAB - Free Report) . Shares have added about 4.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Wabtec due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Wabtec Q3 Earnings Surpass Estimates
WAB reported third-quarter 2024 earnings per share (excluding 37 cents from non-recurring items) of $2.00, which surpassed the Zacks Consensus Estimate of $1.87. The bottom line improved 17.6% year over year due to higher sales and operating margin expansion.
Revenues of $2.66 billion beat the Zacks Consensus Estimate of $2.64 billion. The top line grew 4.4% year over year due to higher sales of the Freight and Transit segments.
Segmental Highlights
Freight net sales of $1.93 billion increased 2.6% year over year. Results were boosted by the strong performance of Services and Digital, which rose 16.5% and 12.7%, respectively. The actual segmental sales figure was below our expectations of $1.97 billion.
Freight segment’s adjusted operating margin increased 2.9 points to 24.1%. Adjusted operating margin benefited from higher sales, improved gross margin and operating expenses.
In the Transit segment, net sales grew 9.6% year over year to $733 million due to strong aftermarket sales. The actual segmental sales figure was higher than our projections of $653 million. The segmental adjusted operating margin increased to 12.8% from 12.5% in the third quarter of 2023.
The adjusted operating margin increased 1.8 points to 19.7%. The operating margin benefited from higher sales and improved gross margins.
Total operating expenses in the reported quarter increased by $25 million to $447 million.
Wabtec exited the third quarter with cash, cash equivalents and restricted cash of $410 million compared with $595 million at the prior-quarter end. Long-term debt was $3.52 billion compared with $3.49billion at the second-quarter end.
During the reported quarter, WAB repurchased shares worth $599 million and paid $35 million in dividends.
2024 Guidance
Wabtec’s revenue guidance remains unchanged in the range of $10.25 billion-$10.55 billion. WAB now expects its 2024 adjusted EPS in the range of $7.45-$7.65. The previous guidance was in the range of $7.20-$7.50.
For 2024, management expects operating cash flow conversion to be greater than 90%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Wabtec has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Wabtec has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Wabtec (WAB) Up 4.7% Since Last Earnings Report?
It has been about a month since the last earnings report for Westinghouse Air Brake Technologies (WAB - Free Report) . Shares have added about 4.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Wabtec due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Wabtec Q3 Earnings Surpass Estimates
WAB reported third-quarter 2024 earnings per share (excluding 37 cents from non-recurring items) of $2.00, which surpassed the Zacks Consensus Estimate of $1.87. The bottom line improved 17.6% year over year due to higher sales and operating margin expansion.
Revenues of $2.66 billion beat the Zacks Consensus Estimate of $2.64 billion. The top line grew 4.4% year over year due to higher sales of the Freight and Transit segments.
Segmental Highlights
Freight net sales of $1.93 billion increased 2.6% year over year. Results were boosted by the strong performance of Services and Digital, which rose 16.5% and 12.7%, respectively. The actual segmental sales figure was below our expectations of $1.97 billion.
Freight segment’s adjusted operating margin increased 2.9 points to 24.1%. Adjusted operating margin benefited from higher sales, improved gross margin and operating expenses.
In the Transit segment, net sales grew 9.6% year over year to $733 million due to strong aftermarket sales. The actual segmental sales figure was higher than our projections of $653 million. The segmental adjusted operating margin increased to 12.8% from 12.5% in the third quarter of 2023.
The adjusted operating margin increased 1.8 points to 19.7%. The operating margin benefited from higher sales and improved gross margins.
Total operating expenses in the reported quarter increased by $25 million to $447 million.
Wabtec exited the third quarter with cash, cash equivalents and restricted cash of $410 million compared with $595 million at the prior-quarter end. Long-term debt was $3.52 billion compared with $3.49billion at the second-quarter end.
During the reported quarter, WAB repurchased shares worth $599 million and paid $35 million in dividends.
2024 Guidance
Wabtec’s revenue guidance remains unchanged in the range of $10.25 billion-$10.55 billion. WAB now expects its 2024 adjusted EPS in the range of $7.45-$7.65. The previous guidance was in the range of $7.20-$7.50.
For 2024, management expects operating cash flow conversion to be greater than 90%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Wabtec has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Wabtec has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.