Wabtec Raises Outlook as Sales Growth Accelerates
Operating cash flow more than doubled to $441 million as conversion reached 82%.
Westinghouse Air Brake Technologies (WAB), the rail-equipment maker, raised its full-year outlook after second-quarter sales growth accelerated to 17.5% from 13.0% in the first quarter.
The quarter extended Wabtec’s growth trajectory as acquisitions and organic demand contributed nearly equally to the $473 million year-over-year sales increase. Acquisitions added $232 million and organic growth contributed $229 million, with currency and portfolio changes accounting for the balance.
Sales rose to $3.179 billion from a year earlier and increased 7.8% from the first quarter. GAAP diluted earnings climbed 18.9% to $2.33 a share, while adjusted earnings rose 21.6% to $2.76 a share. Both measures accelerated from their first-quarter year-over-year growth rates.
Freight sales increased 16.9% to $2.243 billion, driven by 35.0% equipment growth and an 88.5% increase in Digital revenue. The decline in Services narrowed to 4.2% from 17.3% in the prior quarter. Freight’s adjusted operating margin reached 25.8%, up 0.8 percentage point from a year earlier and down slightly from the first quarter.
Transit sales rose 18.9% to $936 million and increased 12.1% sequentially. The segment’s adjusted operating margin expanded 2.5 percentage points from a year earlier to 17.7%, helped by a higher gross margin.
Companywide GAAP operating margin widened to 18.9% from 17.4% a year earlier, while adjusted operating margin increased to 21.9%. Total backlog reached $30.932 billion, up 41.7% from a year earlier and little changed from the first quarter. Twelve-month backlog remained 11.3% above the prior year while declining sequentially to $9.140 billion.
Wabtec now expects 2026 revenue of $12.30 billion to $12.60 billion and adjusted earnings of $10.60 to $10.90 a share. The company increased the revenue midpoint by $110 million and the earnings midpoint by 30 cents; the new earnings midpoint stands 55 cents above the initial range issued with fourth-quarter results.
The company returned $268 million to shareholders during the quarter through $215 million of stock repurchases and $53 million of dividends. Those payments followed Wabtec’s expansion of its buyback authorization to $1.2 billion and a 24% increase in the quarterly dividend.