Wabtec (WAB) shares climbed 8.6% to $76.75 Tuesday as the rail equipment maker beat Wall Street's second-quarter earnings expectations.
The Wilmerding, Pennsylvania-based company reported net income of $102.6 million, or $1.06 a share, up from $83.3 million, or 96 cents a share, a year ago, and beat analysts' expectations of 98 cents a share. Revenue totaled $2.2 billion, up from $1.1 billion a year ago, but was nearly 1% short of Wall Street's forecast.
Wabtec was formed in 1999 with the merger of the Westinghouse Air Brake and MotivePower Industries. In February, the company completed its merger with GE Transportation.
Freight segment sales increased by 262%, or $1.08 billion, due to acquisitions of $1.1 billion which more than offset an organic decrease of $34 million and unfavorable changes in foreign currency exchange rates of $6 million. Transit segment sales increased by 6% or $43 million due to organic sales growth of $81 million and acquisitions of $3 million, partially offset by unfavorable changes in foreign currency exchange rates of $41 million
For full year 2019, the company is calling for sales of about $8.3 billion with earnings between $2.20 to $2.30 a share.
"We are confident the company's diverse business model, focus on aftermarket and services, technology capabilities and global presence will generate long-term growth," said Rafael Santana, Wabtec's president and CEO, in a statement. "We believe our efforts to improve costs, including a synergy target of $250 million by year four following the merger, will drive significant, long-term value for our customers and shareholders."
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