Why did GAAP operating margin decline while adjusted operating margin improved?

GAAP operating margin fell 0.7 points to 17.5%, impacted by the exit of a low-margin Digital project, restructuring costs, purchase accounting adjustments and transaction costs tied to recent acquisitions. Adjusted operating margin rose 0.2 points to 21.9% after excluding these items and non-cash amortization.

What changed in the 2026 financial guidance?

Adjusted diluted EPS guidance was raised to $10.25–$10.65 from $10.05–$10.45. Revenue guidance remained at $12.19–$12.49 billion. The company stated that its guidance assumes tariffs in effect as of April 22, 2026, and that the Dellner Couplers acquisition closed February 10, 2026.

How strong is the company's order backlog?

Total backlog was $30.80 billion at March 31, 2026, compared with $22.30 billion a year earlier, a 38.1% increase. The 12-month backlog was $9.25 billion, up 12.8%. Excluding foreign currency exchange, the multi-year backlog was $8.07 billion higher than the prior year period.

What did the company do with its capital during the quarter?

Wabtec repurchased $242 million of its shares and paid $53 million in dividends. Net cash used for investing activities was $1.105 billion, and total debt was $6.54 billion at quarter end, with cash, cash equivalents and restricted cash of $0.53 billion.

WAB 8-K: Earnings & Results & Regulation FD

Q: What drove the increase in first quarter sales?

Sales rose 13.0% to $2.95 billion, driven by higher sales in both the Freight and Transit segments, including the acquisitions of Inspection Technologies, Frauscher Sensor Technologies and Dellner Couplers. Freight Equipment sales rose 52.5% on higher locomotive deliveries, while Freight Services sales fell 17.3% on lower modernization deliveries.

01—Abstract

Summary

Summary of the 8-K filed April 22, 2026. Cited figures are marked; the original filing is the authoritative source.

Wabtec Corporation (NYSE: WAB) filed this Form 8-K on April 22, 2026 to furnish its first quarter 2026 results press release (Exhibit 99.1) and an earnings presentation (Exhibit 99.2), including updated 2026 financial guidance.

First quarter sales rose 13.0% to $2.95 billion^a, driven by the Freight and Transit segments, including acquisitions of Inspection Technologies, Frauscher Sensor Technologies and Dellner Couplers. GAAP diluted EPS was $2.12, up 12.8%, and adjusted diluted EPS was $2.71, up 18.9%. GAAP operating margin declined 0.7 points to 17.5%, while adjusted operating margin rose 0.2 points to 21.9%.

Cash from operations was $199 million^b, versus $191 million a year earlier, and operating cash flow conversion was 40%. Total backlog reached $30.80 billion at March 31, 2026, up 38.1% from a year earlier, and 12-month backlog was $9.25 billion, up 12.8%. The company repurchased $242 million of its shares and paid $53 million in dividends during the quarter.

Cash, cash equivalents and restricted cash stood at $0.53 billion^c against total debt of $6.54 billion, and total available liquidity was $2.09 billion. Management raised its 2026 adjusted EPS guidance to $10.25–$10.65, an increase of $0.20 at the midpoint, and maintained its revenue outlook of $12.19–$12.49 billion. The filing notes the company does not provide a quantitative reconciliation of forecasted GAAP EPS to adjusted EPS.

02—Key points

Key Highlights

Net sales of $2.95 billion, up 13.0% year over year, with Freight sales up 11.3% and Transit sales up 17.8%.
GAAP diluted EPS of $2.12, up 12.8%; adjusted diluted EPS of $2.71, up 18.9%.
GAAP operating margin of 17.5%, down 0.7 points; adjusted operating margin of 21.9%, up 0.2 points.
Total backlog of $30.80 billion, up 38.1%; 12-month backlog of $9.25 billion, up 12.8%.
Cash from operations of $199 million (40% cash conversion) versus $191 million a year earlier.
2026 adjusted EPS guidance raised to $10.25–$10.65 (up $0.20 at the midpoint); revenue guidance held at $12.19–$12.49 billion.
Repurchased $242 million of shares and paid $53 million in dividends in the quarter; total available liquidity of $2.09 billion.

03—Questions

Frequently Asked Questions

What drove the increase in first quarter sales?
Sales rose 13.0% to $2.95 billion, driven by higher sales in both the Freight and Transit segments, including the acquisitions of Inspection Technologies, Frauscher Sensor Technologies and Dellner Couplers. Freight Equipment sales rose 52.5% on higher locomotive deliveries, while Freight Services sales fell 17.3% on lower modernization deliveries.
Why did GAAP operating margin decline while adjusted operating margin improved?
GAAP operating margin fell 0.7 points to 17.5%, impacted by the exit of a low-margin Digital project, restructuring costs, purchase accounting adjustments and transaction costs tied to recent acquisitions. Adjusted operating margin rose 0.2 points to 21.9% after excluding these items and non-cash amortization.
What changed in the 2026 financial guidance?
Adjusted diluted EPS guidance was raised to $10.25–$10.65 from $10.05–$10.45. Revenue guidance remained at $12.19–$12.49 billion. The company stated that its guidance assumes tariffs in effect as of April 22, 2026, and that the Dellner Couplers acquisition closed February 10, 2026.
How strong is the company's order backlog?
Total backlog was $30.80 billion at March 31, 2026, compared with $22.30 billion a year earlier, a 38.1% increase. The 12-month backlog was $9.25 billion, up 12.8%. Excluding foreign currency exchange, the multi-year backlog was $8.07 billion higher than the prior year period.
What did the company do with its capital during the quarter?
Wabtec repurchased $242 million of its shares and paid $53 million in dividends. Net cash used for investing activities was $1.105 billion, and total debt was $6.54 billion at quarter end, with cash, cash equivalents and restricted cash of $0.53 billion.

04—Continue

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