earnings Published Oct 22, 2026, 8:15 AM UTCUpdated Oct 22, 2026, 8:15 AM UTC

Wabtec Raises Earnings Guidance Despite a Revenue Miss

Wabtec's third-quarter sales rose 8.1% to $3.12 billion and adjusted EPS increased 22% to $2.83. Margin expansion and backlog growth supported higher guidance despite revenue missing estimates.

Wabtec reported stronger earnings but slightly weaker revenue than analysts expected in the third quarter of 2026. Sales rose 8.1% from a year earlier to $3.12 billion, below the $3.20 billion consensus cited in market reporting.

GAAP diluted earnings increased 33.7% to $2.42 a share. Adjusted earnings rose 22% to $2.83 a share, beating the $2.73 estimate. The difference between reported and adjusted results included acquisition accounting and other items detailed in the company's reconciliation.

Profitability improved faster than revenue. GAAP operating margin expanded three percentage points to 20.0%, while adjusted operating margin rose 1.9 points to 22.9%. Higher sales, better gross margins and cost discipline contributed to the increase.

Both operating segments grew. Freight revenue increased 6.9% to $2.24 billion, supported by services, digital products and components, while lower locomotive deliveries offset part of the gain. Transit revenue rose 11.3% to $883 million, helped by the Dellner Couplers acquisition and higher original-equipment and aftermarket sales.

Backlog provides visibility. Wabtec's 12-month backlog reached $8.99 billion, up 8.8%, and total backlog increased 22.9% to $31.44 billion. Acquisitions and currency contributed to growth, so investors should separate organic demand from purchased revenue where possible.

Cash conversion remained healthy. Operating cash flow was $455 million, up from $367 million a year earlier. Wabtec repurchased $305 million of shares and paid $52 million of dividends during the quarter. At September 30, it had about $2.09 billion of available liquidity and $6.38 billion of total debt.

Management raised and narrowed 2026 adjusted EPS guidance to $10.85 to $11.05, increasing the midpoint by $0.20. Revenue guidance remained $12.3 billion to $12.6 billion, whose midpoint was below the consensus cited in the original report.

The quarter therefore presents a clear trade-off: revenue was modestly short of expectations, but margins, cash flow and backlog supported a higher earnings outlook. The final quarter will show whether Wabtec can convert its record backlog into sales without giving back the margin gains.