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What's in the Offing for Wabtec (WAB) Stock in Q4 Earnings?

Zacks Equity Research

Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation WAB, is scheduled to report fourth-quarter 2019 results on Feb 18, before the market opens.

The company has an impressive earnings history, having outperformed the Zacks Consensus Estimate in three (miss in one) of the last four quarters, the average beat being 9.7%.

Let’s see how things shape up for this earnings season.

Factors Likely at Play

Escalating operating expenses, primarily due to surging selling, general and administrative expenses, are likely to get reflected in Wabtec’s earnings. This, in turn, might have led to a deterioration in operating ratio (operating expenses as a percentage of revenues) in the soon-to-be-reported quarter.

However, the company’s fourth-quarter performance is expected to have been boosted by the GE Transportation merger. The merger is expected to have driven net sales at the Transit and Freight segments. Evidently, the Zacks Consensus Estimate for net sales at the Transit segment indicates a 7.8% rise from that reported in the third quarter of 2019. The same for the Freight segment implies an 8.6% increase from the third-quarter reported number.

Westinghouse Air Brake Technologies Corporation Price and EPS Surprise

 

Westinghouse Air Brake Technologies Corporation Price and EPS Surprise

Westinghouse Air Brake Technologies Corporation price-eps-surprise | Westinghouse Air Brake Technologies Corporation Quote


Earnings Whispers

Our proven model does not conclusively predict a beat for Wabtec this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. However, that is not the case here as highlighted below.

Earnings ESP: Wabtec has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.03. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Wabtec carries a Zacks Rank #4 (Sell).

Highlights of Q3 Earnings

In the last reported quarter, Wabtec delivered a positive earnings surprise of 3%. Moreover, the bottom line improved 8.4% year over year. Results were aided by a strong operating performance. Although total sales soared more than 85% year over year owing to the inclusion of GE Transportation products, it fell short of the Zacks Consensus Estimate.

Stocks to Consider

Investors interested in the broader Transportation sector may consider Azul S.A. AZUL, Frontline Ltd. FRO and LATAM Airlines Group S.A. LTM as these stocks possess the perfect mix of elements to beat on earnings in their next releases.

Azul has an Earnings ESP of +16.13% and a Zacks Rank of 1. The company will release fourth-quarter earnings numbers on Mar 12. You can see the complete list of today’s Zacks #1 Rank stocks here.

Frontline is a #1 Ranked company and has an Earnings ESP of +41.18%. This company will announce fourth-quarter earnings numbers on Feb 28.

LATAM Airlines has an Earnings ESP of +4.26% and a Zacks Rank #3. The company will report fourth-quarter earnings on Mar 4.

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