Key Takeaways Wabtec signed a $4.2B multi-year locomotive deal with Kazakhstan's national railway KTZ.This deal boosts WAB's competitive position as a rail technology partner and innovator in the industry.Through this deal, WAB aims to offer Evolution Series locomotives and long-term maintenance services to KTZ.Wabtec Corporation(WAB) is strengthening its operations through strategic agreements. To this end, Wabtec has inked a multi-year locomotive deal worth $4.2 billion with National Company Kazakhstan Te ...

Core Points - Wabtec plans to expand its manufacturing facility in Barton, UK, to increase production capacity and consolidate core activities in the rail sector [1] - The expansion will cover 7,300m², create 150 skilled jobs, and accommodate up to 500 employees upon completion in Q4 2026 [1][3] - The remaining train component work from the closed Doncaster site will be relocated to the Barton facility [3] Investment and Impact - The investment reflects confidence in the West Midlands as a favorable location for business growth [2] - Wabtec's recent closure of the Doncaster site and exit from the vehicle maintenance market indicates a strategic shift [2][4] - The company is providing support for affected Doncaster staff, including redeployment options [3] Strategic Acquisitions - Wabtec finalized an agreement to acquire Frauscher Sensor Technology Group for €675 million ($794.6 million) to enhance its Digital Intelligence business [4][5] - The acquisition aims to integrate Frauscher's railway signaling technologies into Wabtec's offerings [5]

Group 1 - Wabtec's shares increased by 4.9% to $197.96, following a higher-than-average trading volume, contrasting with a 3.6% loss over the past four weeks [1][2] - The stock's recent rise is linked to an agreement with Kazakhstan's national railway for Evolution Series locomotives and long-term service support [2] - Wabtec is expected to report quarterly earnings of $2.27 per share, reflecting a year-over-year increase of 13.5%, with revenues projected at $2.9 billion, up 8.8% from the previous year [2] Group 2 - The consensus EPS estimate for Wabtec has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without earnings estimate revisions [4] - Wabtec holds a Zacks Rank of 3 (Hold), similar to Herc Holdings, which also has a Zacks Rank of 3 and reported a 4.5% increase in its stock price [5][6] - Herc Holdings' EPS estimate for the upcoming report is $2.23, representing a significant year-over-year decline of 48.7% [6]

PITTSBURGH--(BUSINESS WIRE)--Wabtec Corporation (NYSE: WAB) announced today a landmark agreement with National Company Kazakhstan Temir Zholy (KTZ), the national railway of Kazakhstan, to deliver Evolution Series locomotives and provide long-term service support. The multi-year order, valued at $4.2 billion, marks the largest locomotive agreement in Wabtec's history. "For over two decades, our partnership with KTZ has been critical in transforming Kazakhstan's rail industry,†said Rafael Santan. ...

Core Viewpoint - The Zacks Transportation - Equipment and Leasing industry is facing a challenging macroeconomic environment characterized by persistent inflation, tariff-related tensions, and supply-chain disruptions, alongside geopolitical issues [1][5]. Industry Overview - The industry encompasses companies that provide equipment financing, leasing, and supply-chain management services, including aircraft, railcar, and intermodal container lessors. It also includes logistics and transportation solutions for a diverse customer base, primarily in automotive, electronics, transportation, grocery, lumber, food service, and home furnishing sectors [3]. Financial Performance and Shareholder Returns - Companies like Wabtec Corporation and Ryder System are noted for their shareholder-friendly initiatives, such as dividend payouts and share buybacks, indicating strong financial health. Ryder recently approved a 12% dividend increase, raising its quarterly cash dividend to 91 cents per share, while Wabtec announced a 25% increase, raising its quarterly cash dividend from 20 cents to 25 cents [2][4]. Economic Challenges - The industry is grappling with ongoing tariff tensions and inflation, which contribute to economic uncertainty and may hinder stock performance. Supply-chain disruptions and rising operating costs are also limiting growth potential [5][6]. Industry Ranking and Performance - The Zacks Transportation - Equipment and Leasing industry holds a Zacks Industry Rank of 75, placing it in the top 31% of over 250 Zacks industries. However, it has underperformed compared to the S&P 500 and the broader sector over the past year, declining 18.4% against the S&P 500's increase of 18.7% [7][9][10]. Current Valuation - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 13.99X, which is lower than the S&P 500's 23.52X and the sector's 13.84X. Historically, the industry has traded between 8.42X and 15.65X over the past five years [13]. Notable Companies to Watch - **Wabtec Corporation**: Focused on technology-based locomotives and services, Wabtec has shown strong earnings performance, with a 17.6% expected earnings growth rate for 2025 [17][19]. - **Ryder System**: A logistics and transportation company with a long history of dividend payments, Ryder has an expected earnings growth rate of 9.3% for 2025 [22][23]. - **The Greenbrier Companies**: Specializing in railroad freight car equipment, Greenbrier has a notable earnings surprise history and an expected earnings growth rate of 33.1% for 2025 [26][28].

Core Insights - Westinghouse Air Brake Technologies Corporation (WAB) is a leading provider of technology-based solutions for the freight rail and passenger transit industries, with a market capitalization of $32.3 billion [1][2] - The company has over 150 years of expertise in rail technology and is recognized for its diverse product portfolio and global reach, contributing to the industry's shift towards cleaner and smarter transportation [2] Financial Performance - WAB's shares have decreased by 12.6% from their 52-week high of $216.10, reached on July 8, and have declined 7.4% over the past three months, underperforming the Industrial Select Sector SPDR Fund's (XLI) 6.6% return [3][4] - Year-to-date, WAB shares are down slightly, lagging behind XLI's 15.4% increase, while over the past 52 weeks, WAB has gained 12.6%, compared to XLI's 16.5% rise [4] - Following a mixed Q2 earnings report, WAB shares fell 6.4% on July 24; the adjusted EPS of $2.27 grew 15.8% year-over-year, exceeding consensus estimates, but revenue increased only 2.3% to $2.7 billion, missing analyst expectations by 2.2% [5]

On May 8, I wrote my first analysis of Westinghouse Air Brake Technologies (NYSE: WAB ), the company more commonly known as Wabtec. The company had recently announced positive Q1 2025 results that included anI have been involved in the financial world for over 20 years with experience as an advisor, teacher, and writer. I am a full believer in the free-market system and that financial markets are efficient with most stocks reflecting their real current value. The best opportunities for profits on individual ...

Core Insights - Westinghouse Air Brake Technologies Corporation (WAB) reported Q2 2025 earnings per share (EPS) of $2.27, exceeding the Zacks Consensus Estimate of $2.18, marking a 15.8% year-over-year increase driven by higher sales, operating margin expansion, and share repurchases [1][9] - Revenues for the quarter were $2.71 billion, falling short of the Zacks Consensus Estimate of $2.77 billion, but reflecting a 2.3% year-over-year growth due to increased sales in the Transit segment, offset by lower Equipment sales [2][9] Financial Performance - WAB raised its 2025 adjusted EPS guidance to a range of $8.55 to $9.15 from the previous range of $8.35 to $8.95, supported by strong first-half performance, mergers and acquisitions, and prudent cost management [3] - The company also increased its 2025 revenue guidance to $10.925 billion to $11.225 billion from $10.725 billion to $11.025 billion, primarily due to the acquisition of Evident Inspection Technologies Division [4] Segment Performance - The Freight segment reported net sales of $1.91 billion, a slight decline of 0.1% year-over-year, impacted by lower locomotive deliveries due to a supplied part issue, although service sales increased by 6% [5][6] - The Transit segment saw net sales grow by 8.7% year-over-year to $787 million, with an adjusted operating margin increase to 15.2% from 12.7% in the same quarter of 2024 [6] Operational Details - Total operating expenses rose by $22 million year-over-year to $466 million, with the operating ratio increasing to 17.2% from 16.8% [7] - WAB ended the quarter with cash and cash equivalents of $1.49 billion, a significant increase from $698 million at the end of the previous quarter, while long-term debt rose to $4.78 billion from $3.50 billion [7] Shareholder Returns - During the quarter, WAB paid $44 million in dividends and repurchased shares worth $50 million [8]

Core Insights - Westinghouse Air Brake Technologies (WAB) reported revenue of $2.71 billion for the quarter ended June 2025, reflecting a year-over-year increase of 2.3% [1] - The earnings per share (EPS) for the quarter was $2.27, up from $1.96 in the same quarter last year, indicating a positive trend in profitability [1] - The reported revenue was below the Zacks Consensus Estimate of $2.77 billion by 2.38%, while the EPS exceeded the consensus estimate of $2.18 by 4.13% [1] Financial Performance Metrics - WAB's backlog totaled $21.83 billion, slightly below the two-analyst average estimate of $22.34 billion [4] - The backlog for the Transit Group was $4.69 billion, surpassing the average estimate of $4.42 billion [4] - The backlog for the Freight Group was $17.14 billion, which was lower than the average estimate of $17.92 billion [4] Segment Performance - Sales to external customers in the Transit Segment reached $787 million, exceeding the four-analyst average estimate of $762.91 million, representing a year-over-year increase of 8.7% [4] - Sales to external customers in the Freight Segment were $1.92 billion, falling short of the estimated $2.01 billion, reflecting a slight decline of 0.1% compared to the previous year [4] - Adjusted income from operations in the Freight Segment was $480 million, compared to the average estimate of $487.43 million, while the Transit Segment reported an adjusted income of $120 million, exceeding the estimate of $104.42 million [4] Stock Performance - WAB's shares have returned +5.2% over the past month, slightly underperforming the Zacks S&P 500 composite's +5.7% change [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

PART I—FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements for the quarter and six months ended June 30, 2025, detailing assets, liabilities, income, and cash flows [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This item presents the company's unaudited condensed consolidated financial statements, including balance sheets, income statements, and cash flow statements [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$20.39 billion**, driven by a rise in cash, receivables, and goodwill, while total liabilities grew to **$9.55 billion** primarily due to increased long-term debt Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$20,391** | **$18,702** | | Total current assets | $6,354 | $4,943 | | Goodwill | $8,936 | $8,710 | | **Total Liabilities** | **$9,546** | **$8,569** | | Total current liabilities | $3,606 | $3,792 | | Long-term debt | $4,784 | $3,480 | | **Total Equity** | **$10,845** | **$10,133** | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For Q2 2025, net sales increased to **$2.71 billion** and net income attributable to Wabtec shareholders rose to **$336 million**, with six-month net sales reaching **$5.32 billion** and net income **$658 million** Key Income Statement Data (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total net sales | $2,706 | $2,644 | $5,316 | $5,141 | | Gross profit | $938 | $874 | $1,838 | $1,689 | | Income from operations | $472 | $430 | $946 | $842 | | Net income attributable to Wabtec shareholders | $336 | $289 | $658 | $561 | | Diluted EPS | $1.96 | $1.64 | $3.84 | $3.17 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash provided by operating activities was **$400 million**, while investing activities used **$98 million** and financing activities provided **$454 million** Six Months Ended June 30 Cash Flow Summary (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $400 | $569 | | Net cash used for investing activities | $(98) | $(57) | | Net cash provided by (used for) financing activities | $454 | $(523) | | **Increase (decrease) in cash** | **$784** | **$(25)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed information on the company's accounting policies, recent acquisitions, debt structure, and segment performance - The company's remaining performance obligations were approximately **$21.8 billion** as of June 30, 2025, with about **38%** expected to be recognized as revenue in the next 12 months[30](index=30&type=chunk) - Effective January 1, 2025, the Revolving Receivables Program was changed from a sale of receivables to a borrowing facility, with borrowings and repayments now classified under Financing activities[31](index=31&type=chunk) - The company announced definitive agreements to acquire Inspection Technologies for **~$1.78 billion** (closed July 1, 2025), Frauscher Sensor Technology for **~€675 million**, and Dellner Couplers for **~€890 million**[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - In April 2025, the company entered into a new 2025 Credit Agreement, increasing its revolving credit facility to **$2.0 billion** and providing a **$725 million** term loan facility[66](index=66&type=chunk) - In May 2025, the company issued **$500 million** of **4.90%** Senior Notes due 2030 and **$750 million** of **5.50%** Senior Notes due 2035[73](index=73&type=chunk) - Integration 3.0, a multi-year strategic initiative, is expected to incur restructuring charges of **$80 million to $100 million**, with approximately **$20 million** recorded to date[117](index=117&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management provides an analysis of the company's financial performance, liquidity, and capital resources, highlighting key drivers and strategic initiatives [Results of Operations](index=29&type=section&id=Results%20of%20Operations) This section details the company's consolidated net sales and income from operations for Q2 and YTD 2025, analyzing segment contributions and margin improvements Q2 2025 vs Q2 2024 Net Sales Change (in millions) | Segment | Q2 2024 Sales | Acquisitions | Foreign Exchange | Organic | Q2 2025 Sales | | :--- | :--- | :--- | :--- | :--- | :--- | | Freight | $1,920 | $18 | $(11) | $(8) | $1,919 | | Transit | $724 | $9 | $22 | $32 | $787 | | **Total** | **$2,644** | **$27** | **$11** | **$24** | **$2,706** | YTD 2025 vs YTD 2024 Net Sales Change (in millions) | Segment | YTD 2024 Sales | Acquisitions | Foreign Exchange | Organic | YTD 2025 Sales | | :--- | :--- | :--- | :--- | :--- | :--- | | Freight | $3,744 | $33 | $(37) | $80 | $3,820 | | Transit | $1,397 | $17 | $5 | $77 | $1,496 | | **Total** | **$5,141** | **$50** | **$(32)** | **$157** | **$5,316** | - Gross margin improved in Q2 2025 to **34.7%** from **33.0%** in Q2 2024, attributed to favorable mix, productivity, cost management, and restructuring savings[132](index=132&type=chunk) - Q2 2025 SG&A expenses included **$25 million** in transaction costs related to announced acquisitions[133](index=133&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity, supported by operating cash flow, new credit facilities, and senior note issuances to fund strategic growth and operations Total Available Liquidity (in millions) | Component | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,486 | $706 | | Revolving Credit Facility | $2,000 | $1,500 | | Term Loan Facility | $250 | — | | Revolving Receivables Program | $350 | $350 | | **Total Available Liquidity** | **$4,086** | **$2,556** | - Operating cash flow was **$400 million** in the first six months of 2025, compared to **$569 million** in the prior-year period[163](index=163&type=chunk) - The company repurchased **$148 million** of stock in the first six months of 2025, with approximately **$852 million** remaining under the authorized repurchase plan as of June 30, 2025[164](index=164&type=chunk)[197](index=197&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports no material changes to its market risk exposure since December 31, 2024, referring to prior disclosures for details - There have been no material changes in the company's exposure to market risk since December 31, 2024[204](index=204&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's disclosure controls and procedures were deemed effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025[205](index=205&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[206](index=206&type=chunk) PART II—OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and stock repurchase activities [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) This section details ongoing legal proceedings, including asbestos claims and an antitrust lawsuit, with management not expecting a material adverse effect - On June 12, 2025, a court dismissed antitrust claims filed by competitor Progress Rail against Wabtec related to the GE Transportation merger, though other claims remain[102](index=102&type=chunk) - The company is involved in various legal proceedings, including asbestos claims and a contract dispute involving its subsidiary Xorail, but does not expect a material adverse effect on its financial condition[101](index=101&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes in risk factors were reported since the 2024 Annual Report on Form 10-K[210](index=210&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **245,919** shares for approximately **$50 million** in Q2 2025, with **$852 million** remaining under the authorization Q2 2025 Stock Repurchase Summary | Metric | Value | | :--- | :--- | | Total Shares Purchased | 245,919 | | Average Price Paid per Share | $203.32 | | Total Cost (approx.) | $50 million | | Remaining Authorization (as of June 30, 2025) | $852 million |