Investing.com -- Shares of Wabtec (NYSE:WAB) climbed 9% after the company reported first-quarter earnings per share (EPS) of $2.28, which was $0.25 higher than the analyst estimate of $2.03. The company’s revenue for the quarter matched the consensus estimate at $2.61 billion, marking a 4.5% increase from the first quarter of the previous year.
Wabtec, a leading technology provider for the global transportation industry, also provided updated financial guidance for the fiscal year 2025, with adjusted EPS expectations ranging from $8.35 to $8.95, compared to the consensus estimate of $8.54. This updated guidance reflects a cautious but disciplined approach to the current economic landscape, with a $0.10 increase at the mid-point and a wider range to account for volatility and uncertainty.
The company’s strong performance in the first quarter was driven by a 22.9% increase in GAAP diluted EPS and a 20.6% rise in adjusted diluted EPS compared to the same period last year. The results were bolstered by sales growth in both the Freight and Transit segments, improved gross margins, and higher operating margins.
Wabtec’s President and CEO, Rafael Santana, expressed satisfaction with the company’s robust international business and the diversity it adds to the company’s revenue streams. He highlighted the expansion of Wabtec’s installed base of locomotives and transit car systems, which has spurred higher sales growth in services, components, and digital solutions.
The first quarter also saw a healthy backlog, with the 12-month backlog increasing by 6.3% and the multi-year backlog growing by 1.0% compared to the previous year. This backlog provides visibility into the company’s future revenue streams.
Despite a decrease in cash from operations compared to the year-ago period, Wabtec maintained solid liquidity with $698 million in cash and cash equivalents at the end of the quarter. The company also returned $141 million to shareholders through dividends and share repurchases.
Looking ahead, Wabtec expects to maintain strong operating cash flow conversion of greater than 90% for the full year 2025. The company’s performance and forward-looking guidance reflect its ability to navigate through uncertain economic conditions while continuing to deliver on its commitments.
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