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Image source: Flickr user Balint Földesi. 

Despite the impact weaker commodity prices and the slowing global economy is having on the rail industry, Westinghouse Air Brake Technologies (NYSE:WAB), or Wabtec, had a fairly solid year in 2015, at least through the first three quarters. What remains to be seen is whether industry conditions weakened during the fourth quarter or if it was business as usual. All of those questions will be answered later this week when the company releases its fourth-quarter results. Here's what investors will want to keep an eye on when it does.

First, let's review
Before we jump into what to expect in the fourth quarter, let's quickly take a look at where Wabtec left things off in the third quarter. The following is a quick snapshot of those results:

 

Q3 2015 Actuals

Q3 2014 Actuals

Growth (YOY)

Revenue

$809.5 million

$797.3 million

2%

Income From Operations

$152.1 million

$136.0 million

12%

Adjusted Earnings Per Share

$1.02

$0.93

10%

Data source: Westinghouse Air Brake Technologies Corp.

What those results don't tell you is that Wabtec is a tale of two companies: a bustling Freight Group and a slowing Transit Group. That was on full display last quarter, with sales at the Freight Group jumping 12% year over year while sales at the Transit Group slumped by the same rate. That said, because Freight is a larger portion of overall revenue, it pulled revenue up by 2% and drove profits higher as well.

1. Did the Freight Group's strength continue?
Not only was the Freight Group strong last quarter, but it was expected to continue to drive results in the fourth quarter. That expectation is what gave Wabtec CEO Raymond Belter the confidence to say that he expects the company "to finish the year with a good fourth quarter, even though global economic conditions remain sluggish, due mainly to the effects of lower commodities prices."

There's reason to be optimistic that this was the case. In fact, if freight car manufacturer Greenbrier Companies' (NYSE:GBX) recently reported results are any indication, then Wabtec investors shouldn't worry all that much. Greenbrier Companies delivered record-breaking results, with its revenue jumping 62% and outpacing expectations calling for 53% revenue growth. Moreover, earnings were robust at $2.15 per share, which was more than $0.50 per share ahead of forecast. Those results suggest that Wabtec's Freight Group likely also had a very strong quarter. 

2. Did its big stock buyback have any impact on earnings?
Despite posting strong third-quarter results, Wabtec's stock slumped 18% over the final three months of the year. That price weakness actually caught management's attention and they took advantage of it, buying back $365 million in stock during the quarter, which nearly exhausted the company's buyback authorization. That's a big chunk of stock given that Wabtec is a $6.3 billion company, so investors should note how much impact the buyback had on earnings per share during the quarter.

3. What's its outlook for 2016?
Given the slowdown in the global economy, investors will want to keep an eye on what Wabtec expects for the year ahead. Turning again to Greenbrier for a potential glimpse into what Wabtec will say, this is where we could see a bit of a disappointment. Greenbrier reported somewhat disappointing new orders last quarter, which pulled its backlog down. This suggests that freight car orders in general are weakening, which could mute Wabtec's outlook in 2016.

The other aspect of its outlook to watch is its pending acquisition of Faiveley Transport. Back in November, the company received a request for additional information from the Department of Justice, which is taking a closer look at the deal. While there isn't much concern that the deal will be blocked or need to be adjusted, closing it in a timely manner will be key to Wabtec's outlook for the year ahead. That's because Faiveley is being acquired to bolster its sagging Transit Group, so a long delay in closing could cause that segment to continue to weigh down Wabtec's results in 2016.  

Investor takeaway
Despite some economic headwinds, Wabtec appears poised to report another strong quarter, especially if its stock buyback was able to have an impact. That said, all eyes will be on what the company sees in 2016, which could be muted if it is seeing the same slowdown in orders as its competitors and the Faiveley deal takes much longer than anticipated to close. If investors don't like the outlook, it might not matter if the quarter was strong.

Matt DiLallo has no position in any stocks mentioned. The Motley Fool recommends The Greenbrier Companies and Westinghouse Air Brake Technologies. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.