Wabtec's (WAB) Q4 Earnings Beat Estimates, Increase Y/Y
Westinghouse Air Brake Technologies Corporation, which operates as Wabtec Corporation WAB, reported fourth-quarter 2021 earnings (excluding 16 cents from non-recurring items) of $1.18 per share, surpassing the Zacks Consensus Estimate of $1.17. The bottom line improved 20.41% year over year, driven by 2.44% higher revenues to $2,073 million despite supply-chain disruptions. Total sales were boosted by higher revenues from the freight segment as economic activities gain pace. The top line, however, fell short of the Zacks Consensus Estimate of $2,180.3 million with supply-chain issues hurting total sales by 3-4%.
Westinghouse Air Brake Technologies Corporation Price, Consensus and EPS Surprise
Westinghouse Air Brake Technologies Corporation price-consensus-eps-surprise-chart | Westinghouse Air Brake Technologies Corporation Quote
Total operating expenses in the reported quarter increased 12.5% year over year to $388 million primarily due to an 11.9% uptick in selling, general and administrative expenses. The operating ratio (operating expenses as a percentage of revenues) deteriorated 170 basis points from the year-ago quarter’s figure to 18.7%. During the quarter, WAB paid out dividends worth $23 million and bought back shares worth $100 million.
Wabtec’s board reauthorized a share buyback program of up to $750 million and also declared a 25% increase in quarterly common dividend, taking the total to 15 cents per share. The hiked dividend will be paid out on Feb 28, 2022, to its shareholders of record on Feb 25.
Segmental Highlights
Freight net sales increased 6.4% to $1,425 million. Results were boosted by upbeat demand for Freight Services and Components along with the acquisition of Nordco. Segmental operating margin (income from operations as a percentage of sales) increased to 14.5% from 9% in the year-ago quarter.
At the transit segment, net sales declined 5.4% to $648 million due to supply-chain issues, COVID-related disruptions and an unfavorable foreign currency exchange. Segmental operating margin improved to 12.2% from 8.3%.
Balance-Sheet Data
As of Dec 31, 2021, Wabtec, currently carrying a Zacks Rank #3 (Hold), had $473 million worth of cash and cash equivalents compared with $599 million at the end of 2020. WAB generated cash from operations of $314 million in the December quarter.
Long-term debt at the end of the quarter was $4,056 million compared with $3,792 million at 2020 end. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2022 Guidance
Wabtec anticipates sales in the range of $8.3-8.6 billion. The mid-point of the guided range, $8.45 billion, lies below the Zacks Consensus Estimate of $8.59 billion. Adjusted earnings per share are estimated in the band of $4.65-$5.05. The mid-point of this guided range, $4.85, is lower than the Zacks Consensus Estimate of $4.95. Wabtec expects strong cash flow generation with operating cash flow conversion exceeding 90%.
Sectorial Snapshots
Within the broader Transportation sector, the likes of CSX Corporation CSX, Canadian National Railway CNI and GATX Corporation GATX reported fourth-quarter 2021 results last month.
CSX reported fourth-quarter 2021 earnings of 42 cents per share, which surpassed the Zacks Consensus Estimate by a penny. The bottom line improved in double digits year over year owing to higher revenues.
CSX’s total revenues of $3,427 million outperformed the Zacks Consensus Estimate of $3296 million. The top line augmented 21.3% year over year owing to growth across all its businesses as well as revenues from Quality Carriers, which the company acquired in July 2021.
Canadian National reported fourth-quarter 2021 earnings (excluding 2 cents from non-recurring items) of $1.36 per share (C$1.71), which surpassed the Zacks Consensus Estimate of $1.21. The bottom line increased in double digits year over year on lower costs.
Canadian National’s quarterly revenues of $2,977.4 million (C$3,753 million) topped the Zacks Consensus Estimate of $2,917.4 million. The top line improved year over year, driven by higher freight rates and fuel surcharges.
GATX reported fourth-quarter 2021 earnings (excluding 11 cents from non-recurring items) of $1.58 per share, which surpassed the Zacks Consensus Estimate of $1.07. The bottom line surged more than 200% year over year.
GATX’s total revenues of $321 million increased 5.3% year over year, mainly owing to a 5.2% rise in lease revenues, which came in at $288.4 million. Lease revenues contributed 89.8% to the top line.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Westinghouse Air Brake Technologies Corporation (WAB) : Free Stock Analysis Report
CSX Corporation (CSX) : Free Stock Analysis Report
Canadian National Railway Company (CNI) : Free Stock Analysis Report
GATX Corporation (GATX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
