Yahoo Finance Westinghouse Air Brake Technologies Corp (WAB) Q1 2024 Earnings Call Transcript Highlights: ...
Sales: $2.5 billion, up 13.8% year-over-year
Adjusted EPS: Increased by 47.7% from the previous year
Total Cash Flow from Operations: $334 million for the quarter
12-Month Backlog: $7.7 billion, up 11% year-over-year
Multiyear Backlog: $22 billion
GAAP Operating Income: $412 million
Adjusted Operating Margin: 19.8%, up 3.4 percentage points from the previous year
GAAP Earnings Per Diluted Share: $1.53, up 64.5% year-over-year
Adjusted Earnings Per Diluted Share: $1.89, up 47.7% from the previous year
2024 Sales Guidance: Expected to be $10.4 billion at the midpoint, up 7.5% from last year
2024 Adjusted EPS Guidance: Expected to be between $7.00 and $7.40 per share, up about 21.5% at the midpoint
Cash Flow Conversion: Expected to be greater than 90% for the full year
Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: What was the most surprising part of this quarter for Wabtec? A: John A. Olin, Executive VP & CFO, noted the significant sequential improvement in freight margins as the most surprising aspect, attributing it to excellent operational execution and favorable mix, although he cautioned that such high margins are not expected to persist throughout the year.
Q: Can you discuss the impact of proposed locomotive regulations from CARB and the timing of a final decision? A: CEO Rafael O. Santana mentioned that the outcome of the rule is still fluid but reassured that Wabtec is well-positioned technically to support customers regardless of the outcome, highlighting the company's leadership in low-emission products.
Q: How does the mix of equipment and modification services impact gross profit expansion and long-term margin guidance? A: Rafael O. Santana explained that while there might be quarterly variations, the company is confident in its strategy and its ability to drive profitable growth over time. John A. Olin added that favorable mix in the first half of the year is expected to reverse in the second half.
Q: What are the benefits of the improvements made in enabling engines for alternative fuels, and how is this impacting discussions with customers? A: Santana highlighted the ongoing strategy to enhance fuel efficiency, which is significant for customers' costs. He emphasized the adaptability of Wabtec's engines to alternative fuels like biodiesel and hydrogen, which aligns with customer needs for flexible, efficient solutions.
Q: With the strong balance sheet, what is the outlook for shareholder returns and capital allocation? A: John A. Olin indicated a preference for strategic M&A but assured that excess cash would be returned to shareholders through repurchases, reflecting confidence in the company's financial strategy and shareholder value focus.
Q: Can you provide an update on the progress of achieving the $75 million to $90 million run rate cost savings by 2025? A: Olin reported that the company is on track with its cost-saving initiatives, having achieved significant milestones and expecting to ramp up savings linearly over the next few years, aligning with their strategic financial goals.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
