We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Wabtec (WAB) Down 8.4% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Westinghouse Air Brake Technologies (WAB - Free Report) . Shares have lost about 8.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Wabtec due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Q1 Earnings Beat at Wabtec
Wabtec reported first-quarter 2019 earnings (excluding $1.10 from non-recurring items) of $1.06 per share. The bottom line handsomely beat the Zacks Consensus Estimate of 80 cents and improved 15.2% year over year.
Total sales jumped more than 50% year over year to $1,593.6 million and outpaced the Zacks Consensus Estimate of $1,449.8 million. The substantial year over year increase in sales was due to the inclusion of GE Transportation products.
Total operating expenses in the reported quarter increased almost 80% to $321,710 million, primarily due to a 76.4% rise in selling, general and administrative expenses. Also, the operating ratio (operating expenses as a percentage of revenues) deteriorated to 20.2% from 17% in the prior-year period. Notably, lower the value of the metric the better.
Segmental Highlights
At the Transit segment, net sales climbed 6% to $717.18 million driven by organic sales growth and sales from acquisitions. Segmental operating margin (income from operations as a percentage of sales) declined to 8.2% from 10.1% in the year-ago quarter.
Freight net sales jumped 131% to $876.43 million backed by organic sales growth and sales from acquisitions. Segmental operating margin declined to 8.6% from 18.3% in the year-ago quarter.
Liquidity
As of Mar 31, 2019, Wabtec had $512.87 million in cash and cash equivalents compared with $580.91 million at the end of 2018. Long-term debt at the quarter-end was $4.64 billion compared with $3.79 billion at 2018 end.
2019 View Intact
Wabtec still anticipates sales of $8.4 billion for the current year. Adjusted EBITDA and income from operations is estimated at $1.6 billion and $1.2 billion, respectively. Additionally, adjusted earnings are still expected to be between $4 and $4.20 per share.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -6.32% due to these changes.
VGM Scores
Currently, Wabtec has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Wabtec has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Wabtec (WAB) Down 8.4% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Westinghouse Air Brake Technologies (WAB - Free Report) . Shares have lost about 8.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Wabtec due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Q1 Earnings Beat at Wabtec
Wabtec reported first-quarter 2019 earnings (excluding $1.10 from non-recurring items) of $1.06 per share. The bottom line handsomely beat the Zacks Consensus Estimate of 80 cents and improved 15.2% year over year.
Total sales jumped more than 50% year over year to $1,593.6 million and outpaced the Zacks Consensus Estimate of $1,449.8 million. The substantial year over year increase in sales was due to the inclusion of GE Transportation products.
Total operating expenses in the reported quarter increased almost 80% to $321,710 million, primarily due to a 76.4% rise in selling, general and administrative expenses. Also, the operating ratio (operating expenses as a percentage of revenues) deteriorated to 20.2% from 17% in the prior-year period. Notably, lower the value of the metric the better.
Segmental Highlights
At the Transit segment, net sales climbed 6% to $717.18 million driven by organic sales growth and sales from acquisitions. Segmental operating margin (income from operations as a percentage of sales) declined to 8.2% from 10.1% in the year-ago quarter.
Freight net sales jumped 131% to $876.43 million backed by organic sales growth and sales from acquisitions. Segmental operating margin declined to 8.6% from 18.3% in the year-ago quarter.
Liquidity
As of Mar 31, 2019, Wabtec had $512.87 million in cash and cash equivalents compared with $580.91 million at the end of 2018. Long-term debt at the quarter-end was $4.64 billion compared with $3.79 billion at 2018 end.
2019 View Intact
Wabtec still anticipates sales of $8.4 billion for the current year. Adjusted EBITDA and income from operations is estimated at $1.6 billion and $1.2 billion, respectively. Additionally, adjusted earnings are still expected to be between $4 and $4.20 per share.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -6.32% due to these changes.
VGM Scores
Currently, Wabtec has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Wabtec has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.