Wabtec's Q4 Earnings: A Strong Finish to 2024

Wabtec Corporation (NYSE: WAB) wrapped up 2024 on a high note, reporting strong fourth-quarter earnings that reflected the company's robust performance across multiple financial dimensions. The Pittsburgh-based company, which specializes in rail and industrial solutions, delivered impressive results that showcased its operational efficiency and growth potential.



Wabtec's fourth-quarter earnings per diluted share (EPS) reached $1.68, up 9.1% year-over-year, while GAAP EPS was $1.23, up 2.5%. Full-year 2024 sales totaled $10.39 billion, with record operating cash flow of $1.83 billion. The company's strong order momentum, with 20% year-over-year growth including over $1 billion in new locomotive orders and modifications, provided excellent revenue visibility. The 12-month backlog increased by 5.5% on a currency-neutral basis, indicating healthy near-term business momentum.



The Transit segment's performance stood out, with 7.1% revenue growth and a 1.5% improvement in adjusted operating margin to 16.4%. This margin expansion was driven by favorable product mix and integration savings, suggesting improving pricing power and operational leverage in this segment. The company's cash conversion rate was an impressive 117%, indicating superior working capital management and operational efficiency. This robust cash generation provides significant financial flexibility for both growth investments and shareholder returns.

Wabtec's capital deployment strategy, which includes share buybacks and dividend increases, further enhances shareholder value and long-term growth. The company repurchased $1.10 billion of its shares in 2023 and announced a $1.0 billion share buyback authorization in 2024. Additionally, Wabtec increased its quarterly dividend by 25% to $0.25 per share in 2024. These capital allocation decisions signal management's confidence in the company's future prospects and commitment to maximizing shareholder value.



In conclusion, Wabtec's strong order growth, robust cash conversion rate, and capital deployment strategy position the company well for future growth and enhanced shareholder value. The company's impressive Q4 earnings snapshot reflects its operational excellence and commitment to delivering top quartile returns over time. As Wabtec continues to execute on its strategic initiatives and capitalize on market trends, investors can expect the company to maintain its strong performance and create value for shareholders.