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Ahead Of The Bell: Wabtec

The Associated Press

HARTFORD, Conn. (AP) — An analyst cut his profit estimates for railroad-equipment supplier Wabtec Corp. Thursday, saying Wall Street estimates are too high.

Analyst Steve Barger of KeyBanc Capital Markets said the Wilmerding, Pa.-based company's markets are weak and he expects Wabtec will cut its earnings per share forecast following its first-quarter earnings release. The result will likely be "weaker share price performance in the near term," he said in a note to investors.

He cut his 2009 estimate to $2.26 per share from $2.42. He also reduced his 2010 estimate to $2.62 from $2.69.

Analysts surveyed by Thomson Reuters expect earnings this year to be $2.50 per share. For 2010, analysts expect earnings to be $2.76 per share.

Barger maintained his "Hold" rating.

He believes Wabtec's first-quarter results will not likely meet the consensus estimate of 59 cents per share, but are more likely to be closer to his estimate of 52 cents per share.

Barger said if he is correct in his outlook for the first quarter, he anticipates 2009 consensus of $2.50 per share could be reduced and "likely result in additional pressure on the stock, and we are therefore reticent to suggest putting on a sizable position before the company reports."

He also expects Wabtec's freight-equipment market will likely remain weak through much of 2009. But he sees some improvements in the second half of 2009 in the freight aftermarket if "car loadings and utilization rates improve from currently depressed levels," which he expects will happen.

Barger expects more spending on transit in the second half of 2009 and 2010 with federal funding and stimulus spending and possibly from rising oil prices as global demand recovers or if the dollar weakens.