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Wabtec's (WAB) Q1 Earnings & Revenues Increase Year Over Year

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Westinghouse Air Brake Technologies Corporation, which operates as Wabtec Corporation (WAB - Free Report) , reported first-quarter 2022 earnings (excluding 33 cents from non-recurring items) of $1.13 per share, falling short of the Zacks Consensus Estimate of $1.14. The bottom line improved 27% year over year, driven by a 1.4 percentage point margin expansion to 16.5% and 5.29% higher revenues to $1.927 million, despite supply-chain disruptions. The top line, however, fell short of the Zacks Consensus Estimate of $1,971.6 million.

Total operating expenses in the reported quarter increased 4.1% year over year to $356 million, primarily due to an18% increase in engineering costs and a 1.7% uptick in selling, general and administrative expenses. The operating ratio (operating expenses as a percentage of revenues) deteriorated 30 basis points from the year-ago quarter’s figure to 18.4%. During the quarter, WAB bought back 3.1 million shares for $296 million.

Segmental Highlights

Freight net sales increased 11.7% to $1,322 million. Results were boosted by upbeat demand for Freight Services, components and equipment along with the acquisition of Nordco. Segmental operating margin (on an adjusted basis) increased to 19.6% from 18.1% in the year-ago quarter.

At the transit segment, net sales declined 6.5% to $605 million due to supply-chain issues, COVID-related disruptions and an unfavorable foreign currency exchange. Segmental adjusted operating margin improved to 12.3% from 12.2%.

Balance-Sheet Data

As of Mar 31, 2022, Wabtec, currently carrying a Zacks Rank #3 (Hold), had $488 million worth of cash and cash equivalents compared with $473 million at the end of 2021. WAB generated cash from operations of $161 million in the March quarter.

Long-term debt at the end of the quarter was $4,225 million compared with $4,056 million at 2021end. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2022 Guidance Reiterated

Wabtec reaffirms sales in the range of $8.3-8.6 billion. The mid-point of the guided range, $8.45 billion, lies above the Zacks Consensus Estimate of $8.42 billion. Adjusted earnings per share are still 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 $4.88. Wabtec continues to expect strong cash flow generation with operating cash flow conversion exceeding 90%.

Earnings Snapshots

Within the broader Transportation sector, J.B. Hunt Transport Services (JBHT - Free Report) ,CSX Corporation (CSX - Free Report)  and United Airlines (UAL - Free Report)  recently reported first-quarter 2022 results.

J.B. Hunt reported better-than-expected first-quarter 2022 earnings numbers. Quarterly earnings of $2.29 per share surpassed the Zacks Consensus Estimate of $1.91. The bottom line surged 67.2% year over year on the back of higher revenues across all segments.

Total operating revenues of $3,488.6 million also outperformed the Zacks Consensus Estimate of $3,260.5 million. The top line jumped 33.3% year over year.

CSX Corp’s first-quarter 2022 earnings of 39 cents per share beat the Zacks Consensus Estimate by a penny despite the decrease in overall volumes as supply-chain issues continue to dent results. The bottom line improved 25.81% year over year owing to higher revenues, aided by increased shipping rates.

Total revenues of $3,413 million outperformed the Zacks Consensus Estimate of $3291.2 million. The top line increased 21.33% year over year.

United Airlines incurred a loss of $4.24 per share in the first quarter of 2022, wider than the Zacks Consensus Estimate of a loss of $4.19. This is the ninth consecutive quarterly loss suffered by UAL as coronavirus woes continue to dwindle air-travel demand.  

Operating revenues of $7,566 million also fell short of the Zacks Consensus Estimate of $7,657.2 million.

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