Wabtec (WAB) Misses Q4 EPS by 5c; Offers FY21 EPS Guidance Below Consensus, FY21 Revenue Mid-Point Guidance Below Consensus, Renews $500M Buyback

Wabtec (NYSE: WAB) reported Q4 EPS of $0.98, $0.05 worse than the analyst estimate of $1.03. Revenue for the quarter came in at $2.02 billion versus the consensus estimate of $2.04 billion.

• Delivered Strong Cash Flow from Operations of $784 Million for 2020 Including ~$220 Million of One Time Cash Impacts; Returned ~$300 Million to Shareholders
• Fourth Quarter Reported GAAP Earnings Per Share of $0.46; Adjusted EPS of $0.98; Full Year GAAP Earnings Per Share of $2.17; Adjusted EPS of $3.79
• Transit Adjusted Margin Ahead of Plan in 2020; Delivered 200 bps of Improvement
• On-track to Deliver $250 Million Run-Rate of Synergies in 2021
• Book-to-Bill Strengthening with Key Orders for International Locomotives, Modernizations and Service Agreements
• Reauthorized Up to $500 Million of Share Buyback

“Wabtec delivered strong operational performance during a year of unprecedented global challenges,” said Rafael Santana, Wabtec’s president and chief executive officer. “I am proud of how our team responded to the crisis in 2020. We quickly protected our teams, kept our operations delivering for customers, and focused on liquidity, cost management, and execution to strengthen our financial position while returning significant capital to shareholders. We also never lost sight on future growth, investing in new sustainable rail technologies that will transform the future of transportation – making it cleaner, greener, safer, and more efficient.”

“We enter 2021 with positive momentum, as our end-markets continue to show signs of recovery. Global freight volumes and equipment utilization have sequentially improved over the last two quarters, North American OE markets are transitioning through trough, and sustainable investment in global transit remains. I’m confident we’re well-positioned for growth and will continue to perform for our shareowners, our customers, and our employees in the short- and long-term.”

GUIDANCE:

Wabtec sees FY2021 EPS of $3.90-$4.30, versus the consensus of $4.34. Wabtec sees FY2021 revenue of $7.6-7.9 billion, versus the consensus of $7.85 billion.

• Wabtec issued its 2021 sales guidance to a range of $7.6 billion to $7.9 billion, GAAP earnings per diluted share guidance to between $2.65 to $3.05 and adjusted earnings per diluted share to between $3.90 to $4.30. The adjusted guidance excludes estimated expenses for restructuring and amortization expenses.
• With cost actions and synergies stemming from the Wabtec and GE Transportation merger on-track, we expect to achieve a run rate savings of $250 million in 2021, driving improved margins. For full year 2021, Wabtec expects strong cash flow generation with operating cash flow conversion of greater than 90%.
• The company also announced it renewed its share buyback authorization up to $500 million.

For earnings history and earnings-related data on Wabtec (WAB) click here.

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