Westinghouse Air Brake Technologies (NYSE:WAB), or Wabtec, completed its acquisition of GE's (NYSE:GE) former transportation division in late February, which had a notable impact on the company's first-quarter results. Both revenue and earnings soared year over year thanks to that deal as well as healthy conditions in the rail market. Because of that, that company affirmed its full-year guidance.

Wabtec's results: The raw numbers


Q1 2019

Q1 2018

Year-Over-Year Change


$1.59 billion

$1.06 million


Adjusted net income

$140.3 million

$88.4 million


Adjusted earnings per share




Data source: Westinghouse Air Brake Technologies.

What happened with Wabtec this quarter? 

The GE deal drove the quarter:

  • Sales from Wabtec's freight group soared 131% versus the year-ago period to $876 million, due almost entirely to the addition of GE Transportation. Overall, acquisitions added $496 million to the top line, while organic growth provided another $9 million in sales, which offset an $8 million headwind from foreign currency fluctuations. The company noted that GE Transportation had a strong quarter due to the timing of project deliveries.
  • Revenue from the transit group increased about 6% year over year to $717.2 million. Organic sales growth added $77 million to the top line while acquisitions provided $15 million of incremental income, which more than offset a $51 million headwind from foreign exchange.
  • Adjusted net income followed revenue higher, powered mainly by the acquisition of GE Transportation. Growth on a per-share basis, however, wasn't quite as strong, because the company issued shares to help finance the transaction.
  • Wabtec generated $31 million in cash from operations, which was $7 million higher than the year-ago period. Cash flow, however, would have been even higher if it hadn't been for $50 million of additional costs relating to the GE Transportation merger.
  • Wabtec's backlog totaled $23 billion, up significantly from $4.5 billion at the end of the fourth quarter due to the acquisition of GE Transportation.
A transit train in motion at a station.

Image source: Getty Images.

What management had to say 

CEO Raymond Belter commented on the company's results:

Our first-quarter adjusted results represent a solid start to the year, and we're well positioned to meet our financial targets in 2019 based on our current backlog and expected market conditions. Since completing our merger with GE Transportation in late February, we have focused on continuing to serve our customers, integrating our companies and validating the strategic rationale for the combination. We have also confirmed our target to deliver operating synergies of $250 million by year four, demonstrating further confidence in the financial benefits of the merger.

The GE Transportation transaction is providing immediate dividends to Wabtec. The business performed well during the first quarter, which enabled the company to get off to a solid start to the year. The deal should also provide some longer-term benefits as the company integrates it with its legacy operations. That's something investors should keep an eye on, as its success in achieving the $250 million cost savings target as well as keeping customers happy will determine whether this combination is a winner.

Looking forward 

As Belter noted, Wabtec's solid first-quarter results keep it on track to achieve its full-year forecast. That suggests the company should haul in about $8.4 billion in revenue this year. Meanwhile, adjusted earnings should be in the range of $4.00 to $4.25 per share, which would be about 7% more than last year's total.

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