Wabtec results and 2017 financial guidance

Wabtec Corporation has released it’s 2016 quarter four results and issued financial guidance for 2017.

During the quarter, Wabtec acquired majority ownership of Faiveley Transport and initiated a tender offer for Faiveley’s remaining public shares; began the integration of two other recent acquisitions, Workhorse Rail and Gerken Group and completed a $750m notes offering.

Sales were $760m, with higher sales in the Transit Group more than offset by lower sales in the Freight Group. Freight Group sales were affected mainly by lower revenues from train control-related equipment and services, and lower industry deliveries of new freight cars and locomotives. Changes in foreign exchange rates reduced sales by $22m compared to the year-ago quarter.

Income from operations in the fourth quarter was $63m, including transaction expenses of about $26m related to the Faiveley acquisition and expenses of about $15m primarily for contract adjustments and restructuring.

Net income in the fourth quarter was $46m. The effect of all of the items mentioned above reduced net income by $27m.

Wabtec issued 2017 financial guidance, with revenues expected to be about $4.1b and adjusted earnings per diluted share expected to be between $3.95 and $4.15 excluding expected restructuring and transaction charges, and non-controlling interest expense related to the Faiveley acquisition.

Due to the ramp up of projects already in backlog and the timing of synergies from the Faiveley acquisition, the company expects its adjusted earnings per diluted share in the first quarter of 2017 to be similar to its adjusted earnings per diluted share in the fourth quarter of 2016, and it expects the second half of the year to be stronger than the first half of the year. Wabtec estimates synergies from the acquisition to be about $15m to $20m in 2017, with long-term synergies expected to exceed $50m.

Wabtec’s President and CEO, Raymond T. Betler said: “During 2016 we faced many challenges, including significant headwinds in our freight and industrial markets. Yet, our financial results were among the best in our history, we generated more cash from operations than net income, and we completed the most important strategic acquisition we’ve made to date. I’m pleased with how our team responded to difficult market conditions, some of which will persist in 2017. We will continue to control what we can by managing our costs aggressively, while working diligently on the integration of Faiveley. We will also continue to invest in our balanced growth strategies and expect to benefit from our diversified business model and rigorous application of the Wabtec Excellence Program.”

For more information visit www.wabtec.com

27th Feb 2017