Wabtec on Wednesday reported stronger earnings as the equipment maker’s revenue and profits grew in both its cargo and transit segments.
“We had a very strong quarter, as evidenced by continued growth in our backlog, sales, margins and profits,” CEO Rafael Santana said on the company’s (NYSE: WAB) earnings conference call.
Operating income rose 17% to $491 million, while revenue grew 8.4% to $2.89 billion. Earnings per share rose 11% to $1.81.
Merchandise segment revenue increased 8.4%. Equipment sales increased 32% driven by higher locomotive deliveries, while digital sales increased 46% thanks to the acquisition of Inspection Technologies in July. Component sales increased slightly, while service sales decreased by 12% due to the locomotive modernization delivery schedule.
Transit segment revenue increased 8.2% due to higher original equipment and aftermarket sales.
The cargo segment’s trailing 12-month order book increased 9% year-over-year, while its multi-year order book increased 18%. Transit’s trailing 12-month backlog grew 7%, while its multi-year backlog grew 4%.
The freight book was helped by the record $4.2 billion locomotive order and services deal Wabtec landed in September from Kazakhstan National Railway.
Wabtec said the growth in transit orders was supported by unprecedented delays at automakers, passenger growth in key markets such as Europe and investment in rail infrastructure around the world.
Wabtec raised its full-year financial outlook, with its estimated earnings per share rising 18.4% at the midpoint of its range of $8.85 to $9.05.
Still, executives had a cautious outlook on the broader economy.
“We are encouraged by the underlying momentum of our business and the continued strength of our pipeline of opportunities around the world,” Santana said. “Despite the strong momentum we are experiencing, we continue to act cautiously to navigate a volatile and uncertain economic outlook as we move into the final quarter of the year.”
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