Wabtec Corp. on Oct. 22, 2015 reported solid third-quarter 2015 results largely due to growth in the company’s Freight Group.
Third-quarter sales were $810 million, 2% higher than the year-ago quarter and earnings per diluted share were $1.02, 10% higher than 2014. Changes in foreign exchange rates reduced sales by about $39 million and reduced earnings per diluted share by about five cents compared to the year-ago quarter. The company also had expenses of about two cents per diluted share related to the planned acquisition of Faiveley Transport S.A., a provider of integrated systems and services for the railway industry with annual sales of about $1.2 billion.
Wabtec on Oct. 6, 2015 signed a definitive agreement with members of the Faiveley family to acquire approximately 51% of Faiveley Transport. The total purchase price is about $1.8 billion, including assumed debt.
Wabtec’s income from operations was $152 million in the third-quarter 2015, or a record 18.8% of sales, compared to 17.1% in the year-ago quarter.
Cash flow from operations was $144 million. As of Sept. 30, 2015, Wabtec had cash of $208 million and debt of $451 million. During the quarter, the company repurchased 237,027 shares for $22 million, and it has about $151 million remaining under the current repurchase authorization.
Based on Wabtec’s year-to-date results and outlook for the rest of the year, the company affirmed its 2015 earnings guidance for earnings per diluted share of about $4.10, with revenue growth expected to be about 9% for the year.
Raymond T. Betler, Wabtec’s President and CEO, said: “Driven by the performance of our Freight Group, we had another solid operating quarter. We expect to finish the year with a good fourth quarter, even though global economic conditions remain sluggish, due mainly to the effects of lower commodities prices. In this environment, we continue to execute our growth strategies and internal cost improvement initiatives through the Wabtec Performance System. As previously announced, we are also making progress toward completing the acquisition of Faiveley Transport, which we believe will strengthen our position in the global transit business and enhance our future growth opportunities.”