Wabtec Reports Strong Q4 2024 Financial Performance and Unveils 2025 Full-Year Guidance
Wabtec Corporation (NYSE: WAB) has announced its financial results for the fourth quarter of 2024, delivering strong growth and reinforcing its position as a leader in the freight and transit rail industries. The company reported a solid increase in earnings, record cash flow, and continued expansion in key business segments. Also unveiled its financial outlook for 2025, signaling confidence in its long-term growth strategy.
Q4 2024 Financial Highlights
Wabtec’s fourth-quarter 2024 results demonstrated resilience and operational strength, as seen in key performance metrics:
- GAAP earnings per diluted share: $1.23, a 2.5% increase from Q4 2023.
- Adjusted earnings per diluted share: $1.68, reflecting a 9.1% year-over-year increase.
- Total revenue: $2.58 billion, representing a 2.3% increase from the same quarter in 2023.
- Operating cash flow: $723 million, a significant rise from the $686 million reported in Q4 2023.
For the full year 2024, Wabtec reported:
- GAAP earnings per diluted share: $6.04, up 33.3% compared to 2023.
- Adjusted earnings per diluted share: $7.56, a 27.7% increase year-over-year.
- Total annual revenue: $10.39 billion, reflecting robust demand across its business segments.
- Record annual cash flow from operations: $1.83 billion.
Strong Performance and Shareholder Returns
Wabtec’s President and CEO, Rafael Santana, praised the company’s performance, stating, “The Wabtec team delivered a strong 2024 as evidenced by higher orders, sales, margin expansion, increased earnings, and robust cash flow.”
In alignment with its commitment to maximizing shareholder value, Wabtec returned $1.2 billion to shareholders through share repurchases and dividends. The Board of Directors approved a 25% increase in the quarterly dividend and, in December 2024, expanded the company’s share buyback authorization by an additional $1.0 billion.
Santana also emphasized Wabtec’s forward momentum, stating, “I am encouraged by the underlying momentum of our business and the team’s unrelenting focus on execution and delivering for our customers. Looking ahead, I believe Wabtec is well positioned to drive top-quartile returns over time.”
Segment Performance Analysis
Freight Segment
- Q4 2024 sales: $1.79 billion, up slightly by 0.3% from Q4 2023.
- GAAP operating margin: 15.2%, up from 13.6% in Q4 2023.
- Adjusted operating margin: 19.4%, slightly improving from 19.3% in the previous year.
- Full-year freight segment sales increased by 7.9%, driven by strong demand and a strategic production rebalance.
- Margins improved due to lower intangible amortization expenses and increased operational efficiencies.
Transit Segment
- Q4 2024 sales: $789 million, marking a 7.1% increase over Q4 2023.
- GAAP gross margin: 30.6%, up from 28.4% in the previous year.
- Adjusted gross margin: 31.8%, improving by 2.4 percentage points.
- GAAP operating margin: 13.0%, up from 11.9% in Q4 2023.
- The transit segment benefited from strong original equipment (OE) and aftermarket sales, along with cost-saving measures from Integration 2.0 and a favorable product mix.
Robust Backlog and Business Visibility
Wabtec’s 12-month backlog stood at $7.68 billion, reflecting a 3.0% increase compared to the prior year. The company’s total backlog reached $22.27 billion, up by 1.2%. Adjusting for foreign currency fluctuations, the 12-month backlog grew by 5.5%, while the multi-year backlog expanded by 3.6%.
Strong Cash Flow and Financial Liquidity
Wabtec’s strong cash generation remains a cornerstone of its financial strategy:
- Q4 2024 operating cash flow: $723 million, up from $686 million in Q4 2023.
- Total cash and equivalents at the end of 2024: $715 million.
- Total debt: $3.98 billion.
- Available liquidity: $2.21 billion, including $1.50 billion in available credit.
The company’s disciplined financial management enabled it to repurchase $123 million in shares during Q4 2024, bringing the full-year total to $1.10 billion in share repurchases.
2025 Financial Outlook and Long-Term Guidance
Given its strong financial performance, Wabtec has revised its long-term financial targets:
- Mid-single-digit revenue growth CAGR over the next five years.
- 350+ basis points of adjusted operating margin expansion by 2029.
- Double-digit EPS growth CAGR through 2029.
- Operating cash flow conversion exceeding 90%.
For fiscal year 2025, Wabtec projects:
- Revenue: Between $10.725 billion and $11.025 billion.
- Adjusted earnings per diluted share: Between $8.35 and $8.75.
- Operating cash flow conversion: Greater than 90%.
Conference Call and Investor Relations
Wabtec will hold an investor and analyst call at 8:30 a.m. ET today. Interested parties can join the webcast by visiting the company’s website at www.WabtecCorp.com and navigating to the “Events & Presentations” section under Investor Relations. An audio replay will be available by dialing 1-877-344-7529 (U.S.) or 1-412-317-0088 (International) using access code 3404117.
About Wabtec Corporation
Wabtec Corporation (NYSE: WAB) is a global leader in the freight and transit rail industry, offering cutting-edge equipment, digital solutions, and services to enhance efficiency and sustainability. With over 150 years of innovation, Wabtec is committed to driving zero-emission rail solutions and delivering transformative advancements in the rail, mining, marine, and industrial markets.
For more information, visit www.WabtecCorp.com.