01—Abstract
Summary
Summary of the 8-K filed July 24, 2024. Cited figures are marked; the original filing is the authoritative source.
Westinghouse Air Brake Technologies Corporation (Wabtec) furnished this Form 8-K on July 24, 2024 to report its second quarter 2024 results and accompanying investor presentation.
Second-quarter sales rose 9.8% to $2.64 billiona, GAAP diluted earnings per share were $1.64, up 54.7%, and adjusted diluted EPS was $1.96, up 39.0%. GAAP operating margin was 16.3% and adjusted operating margin was 19.3%. The Freight segment drove growth, with sales up 13.1% to $1.92 billion and Equipment and Components sales up 36.4% and 17.5%, while Transit sales rose 2.0% to $724 million.
Cash from operations was $235 millionb in the quarter versus $115 million a year earlier. During the quarter the company repurchased $200 million of shares and paid $35 million in dividends, returning $235 million to shareholders in total. At June 30, 2024, total debt was $4.00 billion, cash and restricted cash were $595 million, and total available liquidity was $2.09 billion.
The 12-month backlog was $7.33 billionc, up 1.6% from the prior year, while total backlog was $22.08 billion, down 1.6%. The company raised and tightened its 2024 adjusted diluted EPS guidance to $7.20 to $7.50, from the prior $7.00 to $7.40 range shown in the presentation.
Revenue guidance was unchanged at $10.25 billion to $10.55 billiond, and operating cash flow conversion is expected to exceed 90%. The company stated it is not providing a quantitative reconciliation of forecasted GAAP EPS to adjusted EPS, citing uncertainty around restructuring, acquisition-related and legal or tax matters.
02—Key points
Key Highlights
- Second-quarter sales of $2.64 billion, up 9.8% year over year, led by the Freight segment's 13.1% increase
- GAAP diluted EPS of $1.64 (up 54.7%) and adjusted diluted EPS of $1.96 (up 39.0%)
- GAAP operating margin of 16.3% and adjusted operating margin of 19.3%, both higher than the prior year's 12.9% and 16.4%
- Adjusted 2024 diluted EPS guidance raised and tightened to $7.20 to $7.50; revenue guidance unchanged at $10.25 billion to $10.55 billion
- Operating cash flow of $235 million in the quarter versus $115 million a year earlier; full-year operating cash flow conversion expected above 90%
- Returned $235 million to shareholders in the quarter through $200 million of share repurchases and $35 million of dividends
- Total debt of $4.00 billion and total available liquidity of $2.09 billion at June 30, 2024; leverage ratio of 1.6x versus 2.4x a year earlier
03—Questions
Frequently Asked Questions
What drove Wabtec's second-quarter 2024 sales growth?
Sales rose 9.8% to $2.64 billion. The Freight segment grew 13.1% to $1.92 billion, with Equipment sales up 36.4% and Components up 17.5%. Transit sales increased 2.0% to $724 million, driven by higher aftermarket sales.
How did the company change its 2024 guidance?
Adjusted diluted EPS guidance was raised and tightened to $7.20 to $7.50, up from $7.00 to $7.40 in the presentation's prior guidance. Revenue guidance of $10.25 billion to $10.55 billion was unchanged, and operating cash flow conversion is expected to be greater than 90%.
How strong is the order backlog?
The 12-month backlog was $7.33 billion at June 30, 2024, up 1.6% from $7.22 billion a year earlier. Total backlog was $22.08 billion, down 1.6% from $22.43 billion, and multi-year backlog decreased $140 million excluding foreign currency effects.
How did cash flow and capital returns look in the quarter?
Cash from operations was $235 million versus $115 million a year earlier, driven by higher net income and improved working capital, partly offset by lower accounts receivable securitization funding. The company repurchased $200 million of shares and paid $35 million in dividends during the quarter.
04—Continue