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Jun 30, 2023
Wabtec Q2 2023 Earnings Report
Delivered strong results driven by sales growth and strategic acquisition.
Key Takeaways
Wabtec reported a strong second quarter in 2023, with sales growth of 17.5% to $2.41 billion. GAAP earnings per share increased by 16.5% to $1.06, and adjusted earnings per share rose by 14.6% to $1.41. The company also raised its full-year adjusted EPS guidance and completed the acquisition of L&M Radiator.
Sales increased by 17.5% compared to the previous year, driven by growth in both the Freight and Transit segments.
GAAP operating margin was flat at 12.9%, while adjusted operating margin was slightly lower at 16.4%.
GAAP EPS and adjusted EPS increased due to higher sales, partially offset by higher interest expense.
The company completed the acquisition of L&M Radiator and returned over $100 million to shareholders through share buybacks and dividends.
Forward Guidance
Wabtec updated its 2023 financial guidance with sales expected to be in a range of $9.25 billion to $9.50 billion and adjusted earnings per diluted share to be in a range of $5.50 to $5.80. For full year 2023, Wabtec expects cash flow generation with operating cash flow conversion of greater than 90 percent.
Positive Outlook
- Sales expected to be in a range of $9.25 billion to $9.50 billion.
- Adjusted earnings per diluted share to be in a range of $5.50 to $5.80.
- Cash flow generation expected.
- Operating cash flow conversion of greater than 90 percent expected.
- Orders pipeline is expected to strengthen as we look out to the second half of 2023 and beyond.
Challenges Ahead
- Changes in general economic and/or industry specific conditions, including the impacts of tax and tariff programs, inflation, supply chain disruptions, foreign currency exchange, and industry consolidation.
- Changes in the financial condition or operating strategies of Wabtec’s customers.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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