Westinghouse Air Brake Technologies (WAB 0.20%), better known as Wabtec, delivered a first-quarter beat and raised full-year guidance. Investors are eager to climb on board, sending Wabtec shares up 10% as of 11 a.m. ET.
Wabtec's business is full speed ahead
Wabtec is one of the world's largest manufacturers of railroad locomotives. The company earned $1.89 per share in the first quarter on revenue of $2.5 billion, surpassing Wall Street's consensus estimate for $1.49 per share in earnings on $2.4 billion in sales.
Revenue was up 13% year over year, and Wabtec's adjusted operating margin was up 3.4 percentage points to 19.8%. Wabtec's freight segment led the way, posting sales growth of 17.2% in the quarter.
"The Wabtec team delivered a strong start to 2024, continuing the momentum experienced in 2023," CEO Rafael Santana said in a statement. "This was evidenced by higher sales, margin expansion, and increased earnings in the quarter."
Post-earnings, the company boosted its full-year earnings guidance by $0.50 per share to $7 to $7.40 per share. Wall Street had been expecting $6.79 per share heading into earnings season.
Is Wabtec a buy after its strong earnings report?
The company ended the quarter with a backlog of $22.1 billion in future business. Wabtec has established itself as a go-to vendor for railroads and transit systems looking to expand and to modernize, including replacing older equipment with new, greener options.
Wabtec is solidly profitable, and has a history of returning some of those profits to shareholders. In the most recent quarter, the company returned $211 million to investors via buybacks and dividends.
This company is never going to deliver tech-like growth, but for income-focused investors seeking exposure to modest growth, Wabtec is a solid option to consider.
