Westinghouse Air Brake Technologies Corporation (WAB) Bundle
A Brief History of Westinghouse Air Brake Technologies Corporation (WAB)
Corporate Overview
Westinghouse Air Brake Technologies Corporation (WAB) is a leading global provider of technology-based locomotives, equipment, systems, and services for the freight rail and passenger transit industries. The company operates in various sectors, including mining and industrial markets, and has a significant international presence with operations in over 50 countries.
Recent Financial Performance
As of September 30, 2024, WAB reported net sales of approximately $7.80 billion for the first nine months of the year, representing a 9.1% increase from $7.15 billion for the same period in 2023. This growth was driven by increased demand in both the Freight and Transit segments, with organic sales contributing $597 million to the net sales increase.
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Net Sales | $7.80 billion | $7.15 billion | +9.1% |
| Net Income | $854 million | $608 million | +40.4% |
| Earnings Per Share (Diluted) | $4.80 | $3.33 | +43.9% |
Segment Performance
The Freight segment saw net sales rise to $5.67 billion, while the Transit segment increased to $2.13 billion. The Freight segment's growth was attributed to higher North American and international locomotive sales, alongside increased mining sales. The Transit segment benefited from enhanced investments in sustainable infrastructure, leading to a $111 million increase in organic sales.
Cost of Sales and Operating Expenses
For the nine months ended September 30, 2024, the cost of sales increased by $264 million, or 5.3%, totaling $5.24 billion. Notably, the cost of sales as a percentage of net sales improved to 67.1% from 69.5% in 2023. Operating expenses also rose by $72 million, reflecting increased sales volume and employee compensation costs, resulting in operating expenses as a percentage of sales decreasing from 17.1% to 16.6%.
| Cost and Expense Metrics | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Cost of Sales | $5.24 billion | $4.98 billion |
| Operating Expenses | $1.29 billion | $1.22 billion |
| Operating Income | $1.28 billion | $958 million |
Cash Flow and Liquidity
WAB's cash flow from operating activities for the first nine months of 2024 was $1.11 billion, a significant increase from $515 million in 2023. The company utilized $106 million for investing activities and reported cash used for financing activities of $1.21 billion, which included $974 million in stock repurchases and $106 million in dividend payments.
| Cash Flow Metrics | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Cash Flow from Operating Activities | $1.11 billion | $515 million |
| Cash Flow from Investing Activities | $(106) million | $(336) million |
| Cash Flow from Financing Activities | $(1.21 billion) | $(323) million |
Stock Performance and Shareholder Returns
WAB's stock performance has been robust, with a diluted earnings per share (EPS) of $4.80 for the first nine months of 2024, compared to $3.33 for the same period in 2023. The company has consistently returned value to shareholders through dividends and stock repurchase programs, totaling $106 million in dividends paid and $974 million in stock repurchases in 2024.
Future Outlook
WAB continues to focus on strategic initiatives to enhance operational efficiency and drive growth, including its Integration 2.0 program aimed at optimizing costs and improving productivity across its operations.
A Who Owns Westinghouse Air Brake Technologies Corporation (WAB)
Ownership Structure
As of 2024, Westinghouse Air Brake Technologies Corporation (WAB) is a publicly traded company listed on the New York Stock Exchange (NYSE) under the ticker symbol WAB. The ownership structure primarily comprises institutional investors, mutual funds, and individual shareholders.
Major Shareholders
The following table summarizes the major shareholders of WAB as of 2024:
| Shareholder | Ownership Percentage | Number of Shares (in millions) | Type of Holder |
|---|---|---|---|
| Vanguard Group, Inc. | 8.5% | 19.3 | Institutional Investor |
| BlackRock, Inc. | 7.9% | 17.9 | Institutional Investor |
| SSgA Funds Management, Inc. | 5.4% | 12.2 | Institutional Investor |
| Wellington Management Co. LLP | 4.6% | 10.4 | Institutional Investor |
| Dimensional Fund Advisors LP | 3.8% | 8.6 | Institutional Investor |
| Other Institutional Investors | 30.0% | 68.0 | Institutional Investors |
| Retail Investors | 30.0% | 68.0 | Individual Shareholders |
Stock Performance
As of the end of September 2024, WAB's stock price was approximately $54.00 per share, reflecting a year-to-date increase of around 15%. The market capitalization of WAB stood at approximately $12.3 billion.
Recent Financial Performance
For the nine months ended September 30, 2024, WAB reported a net income of $854 million, compared to $608 million for the same period in 2023. The revenue for the same period was $7.804 billion, up from $7.151 billion in 2023, representing a 9.1% increase year-over-year.
Dividends
WAB has consistently paid dividends, with a declared cash dividend of $0.20 per share in 2024. The total cash dividends paid year-to-date in 2024 amounted to $106 million.
Future Outlook
WAB is strategically focused on enhancing profitability through various initiatives, including Portfolio Optimization and Integration 2.0. The company anticipates continued growth driven by investments in sustainable infrastructure and increased demand for both freight and transit services.
Westinghouse Air Brake Technologies Corporation (WAB) Mission Statement
Mission Overview
The mission of Westinghouse Air Brake Technologies Corporation (WAB) is to be a global leader in providing value-added, technology-based solutions for the freight rail and passenger transit industries. WAB aims to enhance safety, improve productivity, and reduce maintenance costs for its customers through innovative products and services.
Financial Performance
As of the nine months ending September 30, 2024, WAB reported net sales of $7.80 billion, an increase of $653 million or 9.1% compared to the same period in 2023. The breakdown of net sales is as follows:
| Segment | 2024 Net Sales (in millions) | 2023 Net Sales (in millions) | Change (in millions) | Percentage Change |
|---|---|---|---|---|
| Freight | $5,674 | $5,134 | $540 | 10.5% |
| Transit | $2,130 | $2,017 | $113 | 5.6% |
| Total | $7,804 | $7,151 | $653 | 9.1% |
Cost of Sales
WAB's cost of sales for the nine months ended September 30, 2024, was $5.24 billion, an increase of $264 million or 5.3% from the previous year. Cost of sales as a percentage of net sales improved to 67.1% from 69.5% in 2023.
Operating Expenses
Total operating expenses increased by $72 million, or 5.9%, for the nine months ended September 30, 2024, primarily driven by higher sales volume. The operating expenses as a percentage of sales decreased to 16.6% from 17.1%.
Net Income
Net income attributable to Wabtec shareholders for the nine months ended September 30, 2024, was $844 million, compared to $600 million in 2023, reflecting a year-over-year increase of $244 million.
Cash Flow Summary
WAB's cash flow for the nine months ended September 30, 2024, is summarized as follows:
| Cash Flow Activities | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Operating Activities | $1,111 | $515 |
| Investing Activities | $(106) | $(336) |
| Financing Activities | $(1,209) | $(323) |
Debt and Interest Expense
WAB's long-term debt as of September 30, 2024, stood at $4.017 billion, with an interest expense of $148 million, a decrease from $163 million in the same period of the previous year.
Tax and Effective Rate
The effective income tax rate for the nine months ended September 30, 2024, was 24.1%, down from 25.1% in 2023, reflecting a favorable change in the jurisdictional mix of earnings.
How Westinghouse Air Brake Technologies Corporation (WAB) Works
Company Overview
Westinghouse Air Brake Technologies Corporation (WAB) is a global provider of technology-based locomotives, equipment, systems, and services for the freight rail and passenger transit industries. As of September 30, 2024, WAB operates in over 50 countries with sales in more than 100 countries worldwide. Approximately 52% of WAB's net sales come from international customers.
Financial Performance
For the nine months ended September 30, 2024, WAB reported net sales of $7.80 billion, an increase of $653 million or 9.1% compared to the same period in 2023. This growth was driven by organic sales increases in both the Freight and Transit segments.
| Financial Metrics | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Net Sales | $7,804 million | $7,151 million | $653 million (9.1%) |
| Cost of Sales | $5,235 million | $4,971 million | $264 million (5.3%) |
| Gross Profit | $2,569 million | $2,180 million | $389 million (17.9%) |
| Operating Income | $1,275 million | $958 million | $317 million (33.1%) |
| Net Income | $854 million | $608 million | $246 million (40.5%) |
Segment Analysis
WAB operates primarily through two segments: Freight and Transit. The Freight segment includes locomotive and freight car equipment, while the Transit segment focuses on passenger transit solutions.
Freight Segment
For the nine months ended September 30, 2024, the Freight segment achieved net sales of $5,674 million, an increase of 10.5% from $5,134 million in the previous year. The increase was attributed to higher locomotive sales and modernizations.
| Freight Segment Metrics | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Net Sales | $5,674 million | $5,134 million | $540 million (10.5%) |
| Cost of Sales | $3,707 million | $3,509 million | $198 million (5.6%) |
| Gross Profit | $1,967 million | $1,625 million | $342 million (21.0%) |
Transit Segment
The Transit segment reported net sales of $2,130 million for the nine months ended September 30, 2024, up 5.6% from $2,017 million in 2023, driven by strong demand for original equipment manufacturing and aftermarket products.
| Transit Segment Metrics | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Net Sales | $2,130 million | $2,017 million | $113 million (5.6%) |
| Cost of Sales | $1,528 million | $1,462 million | $66 million (4.5%) |
| Gross Profit | $602 million | $555 million | $47 million (8.5%) |
Operating Expenses
Total operating expenses for the nine months ended September 30, 2024, increased by $72 million, or 5.9%, primarily due to higher sales volume. Selling, general and administrative (SG&A) expenses rose to $915 million from $843 million.
Cash Flow and Liquidity
For the first nine months of 2024, cash provided by operating activities was $1,111 million, compared to $515 million in the same period of 2023. Cash used for investing activities was $(106) million, while cash used for financing activities was $(1,209) million.
| Cash Flow Metrics | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Operating Activities | $1,111 million | $515 million |
| Investing Activities | $(106) million | $(336) million |
| Financing Activities | $(1,209) million | $(323) million |
Debt and Equity
As of September 30, 2024, WAB's long-term debt amounted to approximately $4.017 billion. The effective interest rates on various debt instruments ranged from 1.25% to 8.6%.
| Debt Overview | Type | Face Value | Effective Interest Rate |
|---|---|---|---|
| Term Loan | 2024 Credit Agreement | $225 million | 6.7% |
| Senior Notes | 3.20% Senior Notes, due 2025 | $500 million | 3.4% |
| Senior Notes | 4.70% Senior Notes, due 2028 | $1,250 million | 4.8% |
How Westinghouse Air Brake Technologies Corporation (WAB) Makes Money
Revenue Segments
Westinghouse Air Brake Technologies Corporation (WAB) generates revenue through two primary segments: the Freight Segment and the Transit Segment.
Freight Segment
The Freight Segment focuses on providing equipment and services for rail and freight transportation. For the nine months ended September 30, 2024, the Freight Segment reported:
| Metric | 2024 (in millions) | 2023 (in millions) | Change (in millions) | % Change |
|---|---|---|---|---|
| Net Sales | $5,674 | $5,134 | $540 | 10.5% |
| Cost of Sales | $3,707 | $3,509 | $198 | 5.6% |
| Gross Profit | $1,967 | $1,625 | $342 | 21.0% |
| Income from Operations | $1,149 | $820 | $329 | 40.1% |
The increase in net sales was primarily due to higher demand for locomotive modernizations and engine overhauls, as well as increased mining sales. Services sales increased significantly, contributing to the overall growth of the segment.
Transit Segment
The Transit Segment supplies equipment and services for public transportation systems. For the same period, the Transit Segment reported:
| Metric | 2024 (in millions) | 2023 (in millions) | Change (in millions) | % Change |
|---|---|---|---|---|
| Net Sales | $2,130 | $2,017 | $113 | 5.6% |
| Cost of Sales | $1,528 | $1,462 | $66 | 4.5% |
| Gross Profit | $602 | $555 | $47 | 8.5% |
| Income from Operations | $235 | $208 | $27 | 13.0% |
The growth in the Transit Segment's net sales was attributed to strong demand for Original Equipment Manufacturing and Aftermarket products, driven by increased investments in sustainable infrastructure.
Operating Expenses
For the nine months ended September 30, 2024, total operating expenses increased to $1,294 million from $1,222 million in 2023, reflecting a 5.9% increase. The breakdown is as follows:
| Expense Type | 2024 (in millions) | 2023 (in millions) | Change (in millions) |
|---|---|---|---|
| SG&A Expenses | $915 | $843 | $72 |
| Engineering Expenses | $155 | $157 | ($2) |
| Amortization Expense | $224 | $222 | $2 |
The increase in SG&A expenses was mainly due to costs incurred to support higher sales volume and increased employee compensation and benefits.
Net Income
Net income attributable to Wabtec shareholders for the nine months ended September 30, 2024, was $844 million, compared to $600 million in 2023, reflecting a year-over-year increase of 40.7%.
Cash Flow Analysis
Cash provided by operating activities for the nine months ended September 30, 2024, was $1,111 million, a significant increase from $515 million in the same period in 2023. The cash flow metrics are summarized as follows:
| Cash Flow Type | 2024 (in millions) | 2023 (in millions) | Change (in millions) |
|---|---|---|---|
| Operating Activities | $1,111 | $515 | $596 |
| Investing Activities | ($106) | ($336) | $230 |
| Financing Activities | ($1,209) | ($323) | ($886) |
The increase in cash provided by operating activities was primarily due to higher net income, improved accounts receivable collections, and changes in accounts payable.
Debt and Interest Expense
As of September 30, 2024, total long-term debt stood at $3,517 million. The interest expense for the nine months ended September 30, 2024, was $148 million, down from $163 million in 2023, reflecting lower average debt balances.
Conclusion
Wabtec continues to enhance its profitability through strategic investments in both the Freight and Transit segments, focusing on sustainable infrastructure and modernization of rail systems.
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Article updated on 8 Nov 2024
Resources:
- Westinghouse Air Brake Technologies Corporation (WAB) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Westinghouse Air Brake Technologies Corporation (WAB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Westinghouse Air Brake Technologies Corporation (WAB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.