Shares of Westinghouse Air Brake Technologies Corp (WAB 0.35%), or Wabtec, hit the skids on Friday and were down nearly 10% at 2:30 p.m. EST after the rail equipment maker unveiled its preliminary results for the fourth quarter due to the impact of the changes to the U.S. tax law.
Wabtec's preliminary results showed that sales in the fourth quarter were $1.1 billion and that it earned $0.90 per share after adjustments. Those numbers would push its full-year revenue up to around $3.9 billion and earnings to $3.42 per share. While that suggests sales were slightly ahead of its $3.8 billion guidance, it implies that earnings were on track to come in under the low end of its recently reduced $3.45 to $3.55 per share guidance range. Meanwhile, earnings were even lower after factoring in $0.45 per share in charges relating to the changes in the U.S. tax law as well as other one-time items during the quarter.
"2017 was a year of transition and positioning the company for the future," according to comments by CEO Raymond Betler, who noted that Wabtec made progress on integrating its Faiveley acquisition as well as implemented several processes that should improve its performance in the coming years. Because of that, the company "expect[s] to generate growth in revenues, adjusted earnings per diluted share, and cash flow from operations" in 2018, according to Betler. Wabtec will provide that guidance when it reports final 2017 numbers on Feb. 20.
Wabtec battled several headwinds last year, which caused results to come in below expectations. However, it expects to get back on track in 2018 as those headwinds begin to abate and its growth initiatives kick into gear.