- Westinghouse Air Brake Technologies Corp (NYSE:WAB) (Wabtec) reported fourth-quarter FY21 sales growth of 2.4% year-over-year to $2.07 billion, missing the consensus of $2.18 billion.
- Adjusted EPS $1.18 (+20.4% Y/Y), beating consensus of $1.17.
- The gross margin expanded by 650 bps to 31.5%. The adjusted gross margin was 31.7%, up by 570 bps.
- The operating margin was 12.7%, up by 470 bps, and expanded by 210 bps to 16.1% on an adjusted basis.
- Adjusted EBITDA increased by 17.9% Y/Y to $396 million, and margin expanded by 250 bps to 19.1%.
- The company noted sales results were adversely impacted by 3% to 4% during the quarter due to supply chain disruptions.
- Freight segment sales were $1.43 billion, an increase of 6.4% Y/Y, and adjusted operating margin expanded by 240 bps 18.7%
- Transit segment sales were $648 million, a decrease of 5.4% Y/Y, and adjusted operating margin expanded by 230 bps to 13.6%.
- At the end of the quarter, the backlog stood at $22.17 billion (+2.7% Y/Y). Wabtec generated cash from operating activities of $1.07 billion (+36.9% Y/Y), in an operating cash flow conversion of 102%.
- The company had cash and equivalents of $473 million and total debt of $4.06 billion. The total available liquidity was $1.67 billion.
- Buyback: During the quarter, Wabtec repurchased $100 million of shares. The Board reauthorized a share buyback program up to $750 million.
- Dividend: Wabtec declared a 25% increase in the regular quarterly common dividend to $0.15 (prior dividend $0.12/per share) payable on February 28, 2022, to holders of record on February 25, 2022.
- FY22 Guidance: Wabtec expects sales of $8.30 billion - $8.60 billion, versus the consensus of $8.46 billion and adjusted EPS of $4.65 - $5.05, versus the consensus of $4.87.
- It expects strong cash flow generation with operating cash flow conversion of greater than 90%.
- Price Action: WAB shares closed higher by 2.57% at $89.73 on Tuesday.
