Wabtec earnings rise on higher freight and transit sales

Wabtec disclosed a higher third-quarter revenue and earnings, alongside an increase in its outlook as its freight and transit equipment backlogs expanded. Operating income rose 27%, to $625 million, while revenue grew 8%, to $3.12 billion, according to the company's announcement on Wednesday. Earnings per share climbed 34%, to $2.42.

Wabtec (NYSE: WAB) elevated its full-year adjusted EPS guidance to a range of $10.85 to $11.05, a 21% to 23.2% increase from the previous forecast of an 18.2% to 21.5% rise. Chairman and Chief Executive Rafael Santana attributed the company's success to its portfolio's momentum, disciplined execution, and successful strategic actions that bolster growth, enhance margins, and boost earnings.

Santana highlighted that the company's investments in technologies and response to healthy customer demand are strengthening its competitive position and solidifying Wabtec's status as a leading industrial technology firm. Freight segment revenue grew 6.9% in the quarter, with digital intelligence revenue up 24.2% following Wabtec's acquisition of Frauscher Sensor Technologies and robust demand.

The company secured new locomotive and modernization orders worth $633 million from two Class I railroads, though Santana stated that increased parts orders due to Class I railroads reactivating stored locomotives have not yet translated into new locomotive orders. Wabtec's Freight segment backlog grew 7.5% year-over-year to $6.54 billion, while the Transit segment revenue rose 11.3% to $883 million, fueled by the acquisition of Dellner Couplers of Sweden and elevated original equipment and aftermarket sales.

The Transit segment backlog increased 12.2% to $2.45 billion. This report signifies a recovery in railroad equipment use without indicating a widespread resurgence in new-equipment spending.