Wabco Holdings (WBC) Tops Q2 EPS by 5c, Revenues Beat; Boosts FY18 EPS/Revenue Guidance Outlook

Wabco Holdings (NYSE: WBC) reported Q2 EPS of $1.95, $0.05 better than the analyst estimate of $1.90. Revenue for the quarter came in at $1 million versus the consensus estimate of $992.96 million.

• Q2 2018 sales of $1,001.2 million, up 25.9 percent from a year ago and up 20.7 percent in local currencies
• Q2 2018 reported operating margin of 14.6 percent, up from 13.6 percent a year ago; performance Q2 2018 operating margin of 15.2 percent, up from 14.7 percent a year ago
• In Q2 2018, WABCO continued to efficiently convert income into cash, resulting in net cash from operating activities of $77.2 million
• Q2 2018 reported diluted EPS of $1.95, up 21.1 percent from $1.61 a year ago; performance Q2 2018 diluted EPS of $2.00, up 18.3 percent from $1.69 a year ago
• Updates sales guidance for full year 2018 to now range from $3,850 million to $3,950 million versus previous guidance from $3,885 million to $4,015 million, primarily driven by foreign exchange assumptions; in local currencies, sales growth to now range from 13.0% to 16.0% versus previous guidance from 12.0% to 16.0%
• Updates diluted EPS guidance for full year 2018 to now range from $7.10 to $7.40 versus previous guidance from $6.95 to $7.45; performance full year 2018 diluted EPS to now range from $7.45 to $7.75 versus previous guidance from $7.30 to $7.80

“In Q2 2018, we achieved over $1 billion in sales for the second consecutive quarter as we benefited from strong global market growth while continuing to outperform the commercial vehicle industry relative to global truck and bus production,” said Jacques Esculier, WABCO Chairman and Chief Executive Officer. “We also delivered robust quarterly earnings per share on a reported basis, up over 21 percent, and on a performance basis, up over 18 percent, versus a year ago.”

“WABCO generated $17.4 million of net materials and conversion productivity in the second quarter as a result of our relentless drive to sustain cost-efficiency. This reflects another quarterly record for conversion productivity of 8.2 percent in our factories and solid gross materials productivity of 4.5 percent. During this quarter we faced a significant increase in raw material costs alongside supply chain constraints which are currently impacting the industry. These supply chain constraints also hampered WABCO’s ability to fully capitalize on growth opportunities, particularly in the aftermarket,” added Esculier.

GUIDANCE:

Wabco Holdings sees FY2018 EPS of $7.45-$7.75, versus the consensus of $7.71. Wabco Holdings sees FY2018 revenue of $3.85-3.95 billion, versus the consensus of $3.97 billion.

For earnings history and earnings-related data on Wabco Holdings (WBC) click here.

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