Westinghouse Air Brake Technologies(NYSE: WAB), better known as Wabtec, delivered a first-quarter beat and raised full-year guidance. Investors are eager to climb on board, sending Wabtec shares up 10% as of 11 a.m. ET.
Wabtec's business is full speed ahead
Wabtec is one of the world's largest manufacturers of railroad locomotives. The company earned $1.89 per share in the first quarter on revenue of $2.5 billion, surpassing Wall Street's consensus estimate for $1.49 per share in earnings on $2.4 billion in sales.
Revenue was up 13% year over year, and Wabtec's adjusted operating margin was up 3.4 percentage points to 19.8%. Wabtec's freight segment led the way, posting sales growth of 17.2% in the quarter.
"The Wabtec team delivered a strong start to 2024, continuing the momentum experienced in 2023," CEO Rafael Santana said in a statement. "This was evidenced by higher sales, margin expansion, and increased earnings in the quarter."
Post-earnings, the company boosted its full-year earnings guidance by $0.50 per share to $7 to $7.40 per share. Wall Street had been expecting $6.79 per share heading into earnings season.
Is Wabtec a buy after its strong earnings report?
The company ended the quarter with a backlog of $22.1 billion in future business. Wabtec has established itself as a go-to vendor for railroads and transit systems looking to expand and to modernize, including replacing older equipment with new, greener options.
Wabtec is solidly profitable, and has a history of returning some of those profits to shareholders. In the most recent quarter, the company returned $211 million to investors via buybacks and dividends.
This company is never going to deliver tech-like growth, but for income-focused investors seeking exposure to modest growth, Wabtec is a solid option to consider.
Should you invest $1,000 in Westinghouse Air Brake Technologies right now?
Before you buy stock in Westinghouse Air Brake Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Westinghouse Air Brake Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of April 22, 2024
Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Westinghouse Air Brake Technologies. The Motley Fool has a disclosure policy.
