Wabtec reports first quarter EPS of $1.02

Written by Carolina Worrell
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Wabtec Corporation on April 26, 2016 reported results for first-quarter 2016, with higher sales in the company’s Transit Group more than offset by lower sales in the Freight Group, leading to $772 million in sales for the quarter. Changes in foreign exchange rates reduced sales by about $18 million compared to the year-ago quarter.

Income from operations was $142 million, or 18.4% of sales, compared to 18.1% in the year-ago quarter, reflecting benefits from cost-reduction initiatives, Wabtec says. Earnings per diluted share were $1.02. Excluding expenses of about 3 cents per diluted share related to the pending acquisition of Faiveley Transport, earnings per diluted share were $1.05.

In the quarter, the company generated cash from operations of $76 million. At March 31, 2016, the company had cash of $263 million, an additional $213 million of cash held in escrow for the Faiveley Transport acquisition, and debt of $802 million. In the first quarter, Wabtec repurchased 1.95 million shares of its common stock for about $134 million, or about $69 per share. The company has about $216 million remaining under its current repurchase authorization.

Based on its first quarter results and outlook for the rest of the year, Wabtec affirmed its 2016 guidance for earnings per diluted share to be between $4.30-$4.50, with revenues now expected to be slightly down for the year. The company expects 2016 quarterly results to improve sequentially during the year as it realizes the benefits of ongoing cost reduction initiatives and as projects already in backlog begin to ramp up. This guidance does not include Wabtec’s pending acquisition of Faiveley Transport, which is progressing and which Wabtec currently expects to close by mid-year, depending on the timing of regulatory approvals. Faiveley Transport is a global supplier of high added value integrated systems for the railway industry with annual revenues of about $1.2 billion.

Raymond T. Betler, Wabtec’s President and CEO, said: “We continue to expect another record earnings year, even as we face challenges in some of our key markets. We are responding to these challenges with aggressive cost- and efficiency-improvement programs, while continuing to invest in growth opportunities around the world. We remain optimistic about our long-term prospects and expect to continue to benefit from our diversified business model, balanced growth strategies and rigorous application of the Wabtec Performance System.”

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