Wabtec Corporation has reported results for the 2016 second quarter, including sales of $724 million, a decrease of approximately $9 million compared to last year’s second quarter due to changes in foreign exchange rates.
Higher sales in the Transit Group were more than offset by lower sales in the Freight Group, which were mainly affected by lower revenues from train control-related equipment and services, a decrease in rail traffic volumes, and lower industry deliveries of new freight cars and locomotives.
“Our Transit business is performing well, with revenue growth, improved profitability and a strong backlog,” said Raymond T. Betler, Wabtec president and CEO. “Our Freight business, however, continues to be affected by overall rail industry conditions and the sluggish global economy.”
Income from operations was 18.4 percent of sales, for a total of $133 million. The 2015 second quarter’s income from operations was also 18.4 percent of sales. The company’s operating margin remained the same mainly due to the benefits of cost-reduction initiatives and improved performance in the Transit Group.
Earnings per diluted share were $1.00 for the quarter. Excluding expenses of approximately 5 cents per diluted share due to the pending acquisition of Faiveley Transport, adjusted earnings per diluted share were $1.05.
Wabtec, basing its observations on its first half results and outlook for the rest of the year, has updated its full-year 2016 earnings guidance for earnings per diluted share to be between $4.00 to $4.20, with revenues now expected to be down approximately 10 percent compared to 2015. Wabtec expects to complete the Faiveley Transport acquisition in the fourth quarter, depending on the timing of regulatory approvals.
“In this environment we are focused on controlling what we can by aggressively reducing costs, generating cash and investing in our growth opportunities, including acquisitions. As demonstrated by our first half operating margin of 18.4 percent and cash from operations at 14 percent of revenues, we are managing the business well in these market conditions,” added Betler.