Analyst Ratings

Return to Article

Shares Of Wabtec Leap On 1Q Surprise, '09 Forecast

The Associated Press

NEW YORK (AP) — Shares of Wabtec Corp. leaped Wednesday after the railcar systems manufacturer reported first-quarter earnings that surpassed Wall Street's expectations, and an analyst lifted the stock to "Buy."

Also fueling investors optimism, the company reaffirmed its earnings prediction for the full-year.

The stock gained $4.72, or 15.3 percent, to $35.54 in afternoon trading.

The company, also known as Westinghouse Air Brake Technologies Corp., said its quarterly profit inched up 0.5 percent to $32.7 million, or 68 cents per share, compared with $32.5 million, or 66 cents per share, a year ago.

Revenue fell 1.4 percent to $378 million from $383.3 million in the first-quarter of 2008.

Analysts polled by Thomson Reuters, on average, forecast a profit of 58 cents per share on sales of $385.4 million.

The company said that growth in its transit unit partially offset lower sales in its freight group. Wabtec also credited cost-cutting measures for its results.

For 2009, the company continues to expect a profit between $2.45 and $2.75. Analysts currently predict $2.46 per share.

Wabtec plans to continue to cut costs to offset further freight demand weakness this year.

In a note to clients Wednesday, KeyBanc Capital Markets analyst Steve Barger raised his rating on Wabtec to "Buy" from "Hold," calling the first-quarter results "impressive" in the face of "what could be the worst freight railcar delivery environment since the early 2000s."

Barger noted that Wabtec was also able to grow its margins beyond his expectations.

He also raised his earnings estimates for this year and next.

"In our view, Wabtec is a company investors should want to own at these valuations," he said. "...With management's reiteration of its guidance, we are inclined to believe this performance could be repeatable."