Third Quarter 2026
Filed Oct 21, 2026Wabtec Reports Strong Third Quarter 2026 Results Raised and Tightened Adjusted EPS Guidance
Third-quarter sales grew 8.1%, GAAP diluted EPS increased 33.7%, adjusted diluted EPS increased 22.0%, both segments expanded operating margins, and the company raised and tightened adjusted EPS guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Third Quarter Net salesGAAP | $3.12B | – | 8.1 % |
| Third Quarter Gross profitGAAP | $1.16B | – | – |
| Third Quarter GAAP Gross MarginGAAP | 37.3 % | – | 2.6 pts |
| Third Quarter Adjusted Gross Marginnon-GAAP | 37.4 % | – | 1.8 pts |
| Third Quarter Total operating expensesGAAP | −$539M | – | – |
| Third Quarter Operating expenses as a % of Net salesGAAP | 17.3 % | – | – |
| Third Quarter Income from operationsGAAP | $625M | – | – |
| Third Quarter GAAP Operating MarginGAAP | 20.0 % | – | 3.0 pts |
| Third Quarter Adjusted Operating Marginnon-GAAP | 22.9 % | – | 1.9 pts |
| Third Quarter Net incomeGAAP | $411M | – | – |
| Third Quarter Net income attributable to Wabtec shareholdersGAAP | $409M | – | – |
| Third Quarter GAAP Diluted EPSGAAP | $2.42 | – | 33.7 % |
| Third Quarter Adjusted Diluted EPSnon-GAAP | $2.83 | – | 22.0 % |
| Third Quarter Cash Flow from OperationsGAAP | $455M | – | $88 |
| Third Quarter Operating Cash Flow Conversionnon-GAAP | 82 % | – | – |
| Third Quarter EBITDAnon-GAAP | $777M | – | – |
| Third Quarter Adjusted EBITDAnon-GAAP | $782M | – | – |
| Nine Months Net salesGAAP | $9.25B | – | 12.8 % |
| Nine Months Gross profitGAAP | $3.39B | – | – |
| Nine Months Gross profit as a % of Net salesGAAP | 36.6 % | – | – |
| Nine Months Total operating expensesGAAP | −$1.64B | – | – |
| Nine Months Income from operationsGAAP | $1.74B | – | – |
| Nine Months Income from operations as a % of Net salesGAAP | 18.8 % | – | – |
| Nine Months Net incomeGAAP | $1.17B | – | – |
| Nine Months Net income attributable to Wabtec shareholdersGAAP | $1.17B | – | – |
| Nine Months GAAP Diluted EPSGAAP | $ 6.86 | – | 21.6 % |
| Nine Months Adjusted Diluted EPSnon-GAAP | $ 8.29 | – | 20.5 % |
| Nine Months Cash Flow from OperationsGAAP | $1.09B | – | – |
| Nine Months Operating Cash Flow Conversionnon-GAAP | 69% | – | – |
| Nine Months EBITDAnon-GAAP | $2.19B | – | – |
| Nine Months Adjusted EBITDAnon-GAAP | $2.24B | – | – |
| 12-Month Backlogother | $8.99B | – | 8.8 % |
| Total Backlogother | $31.43B | – | 22.9 % |
| Freight Services salesother | $794M | – | – |
| Freight Equipment salesother | $679M | – | – |
| Freight Components salesother | $395M | – | – |
| Freight Digital Intelligence salesother | $369M | – | – |
| Transit Original Equipment Manufacturer salesother | $408M | – | – |
| Transit Aftermarket salesother | $475M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| FreightServices sales were up 6.7% driven by core services demand and higher modernization deliveries. Digital sales were up 24.2% driven by the acquisition of Frauscher Sensor Technologies and strong core digital demand. Components sales were up 5.3% driven by industrial, maintenance of way, and international demand. | $2.24B | – | 6.9 % |
| TransitSales growth was driven by the acquisition of Dellner Couplers and higher OE and aftermarket sales, partially offset by unfavorable foreign currency exchange. Sales were up 12.5% on a constant currency basis. | $883M | – | 11.3 % |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
Full year 2026 outlook
- Revenue$12.30 billion to $12.60 billion
- NoteAdjusted EPS guidance: $10.85 - $11.05
- NoteAdjusted EPS guidance was raised $0.20 at the midpoint
- NoteRevenue guidance is up 11.5% at the midpoint versus prior year
- NoteAdjusted EPS guidance is up 22.0% versus prior year at the midpoint
Capital returns
- During the third quarter, the Company repurchased $305 million of Wabtec shares.
- During the third quarter, the Company paid $52 million in dividends.
What drove it
- Consolidated third-quarter sales increased 8.1% due to higher sales in Freight and Transit, including the acquisitions of Frauscher Sensor Technologies and Dellner Couplers.
- GAAP and adjusted operating margins benefited from sales growth and improved gross margins.
- GAAP EPS and adjusted EPS increased primarily due to higher sales, operating margin expansion, and non-operational benefits primarily related to currency fluctuations.
- Third-quarter operating cash flow increased because of higher net income.
- At September 30, 2026, multi-year backlog was $5.86 billion higher than the prior-year period. Excluding foreign currency exchange, multi-year backlog was $5.46 billion higher, up 21.4%.
Concerns
- Freight Equipment sales were up 0.3% as increased mining sales were partially offset by lower locomotive deliveries.
- Freight Components demand offsets included lower North America rail build and portfolio optimization efforts.
- Transit sales were partially offset by unfavorable foreign currency exchange.
- Transit operating-margin improvement was partially offset by higher operating expenses as a percentage of revenue.
- The company cited risks including tariffs, inflation, supply chain disruptions, foreign currency exchange, project timing, decreased freight or passenger rail traffic, manufacturing costs, acquisition integration, and cybersecurity and data protection risks.
What to watch
- Execution against full-year 2026 adjusted EPS guidance of $10.85 - $11.05 and revenue guidance of $12.30 billion to $12.60 billion.
- Freight core services demand, modernization deliveries, mining sales, locomotive deliveries, and North America rail-build conditions.
- The contribution from Frauscher Sensor Technologies and Dellner Couplers.
- Whether backlog converts into revenue while operating-margin expansion is maintained.
- Operating cash flow conversion following 82 % in the third quarter and 69% year to date.
Balance sheet and cash flow
- Cash, cash equivalents and restricted cash: $ 489 at September 30, 2026, versus $ 789 at December 31, 2025.
- Total debt: $6.38 billion at the end of the quarter.
- Total available liquidity: $2.09 billion, including $0.48 billion in cash and cash equivalents plus $1.61 billion available under current credit facilities.
- Nine-month net cash used for investing activities: $ (1,243), versus $ (1,887).
- Nine-month net cash used for financing activities: $ (147), versus net cash provided by financing activities of $ 907.
- Nine-month decrease in cash: $ (300), versus $ (187).
Analysis
Wabtec reported broad-based third-quarter growth. Net sales were $ 3,120 versus $ 2,886 in the prior-year quarter, while Freight revenue increased 6.9 % to $2,237 and Transit revenue increased 11.3 % to $883. The sales bridge identifies $114 of acquisition contribution, $137 of organic growth, $ (12) from portfolio optimization, and $ (5) from foreign exchange. Freight growth reflected services, digital and components demand, while Transit growth included Dellner Couplers and higher OE and aftermarket sales.
Profitability expanded materially. GAAP gross margin was 37.3 % versus 34.7 %, GAAP operating margin was 20.0 % versus 17.0 %, and adjusted operating margin was 22.9 % versus 21.0 %. GAAP diluted EPS rose to $2.42 from $1.81 and adjusted diluted EPS rose to $2.83 from $2.32. Management attributed EPS growth to higher sales, operating-margin expansion, and non-operational benefits primarily related to currency fluctuations.
Both reportable segments increased margins. Freight GAAP operating margin increased to 23.0 % from 19.8 %, while adjusted operating margin increased to 26.4 % from 24.5 %. Transit GAAP operating margin increased to 16.4 % from 14.5 %, and adjusted operating margin increased to 18.1 % from 15.5 %. Freight benefited from gross-margin improvement and lower operating expenses as a percentage of revenue. Transit benefited from gross-margin improvement, partly offset by higher operating expenses as a percentage of revenue.
Cash generation strengthened in the quarter, with cash from operations of $455 versus $367, although operating cash flow conversion was 82 % versus 83 %. The company repurchased $305 million of shares and paid $52 million in dividends. It ended the quarter with cash, cash equivalents and restricted cash of $0.49 billion, total debt of $6.38 billion, and total available liquidity of $2.09 billion.
Backlog increased, supporting management's stated visibility. Total backlog was $31,435 versus $25,577 and 12-month backlog was $8,992 versus $8,267. Wabtec raised and tightened full-year adjusted EPS guidance to $10.85 - $11.05, while maintaining expected full-year revenue of $12.30 billion to $12.60 billion. The filing does not provide the prior numerical guidance range, so the magnitude of the stated midpoint increase cannot be independently compared with a prior range from the supplied documents.
Management, verbatim
Wabtec delivered another strong quarter, evidenced by sales growth, margin expansion and a 22% increase in adjusted EPS.
Rafael Santana, Chairman and CEO
The strength of our performance reflects our momentum across the portfolio, disciplined execution by our teams, and the continued success of our strategic actions.
Rafael Santana, Chairman and CEO
Our teams continue to translate healthy customer demand into profitable growth while investing in technologies that will advance the future of transportation.
Rafael Santana, Chairman and CEO
Not in the filing
stated, not guessed- Prior numerical full-year 2026 adjusted EPS guidance range was not provided in the supplied documents.
- GAAP net income margin was not reported.
- Free cash flow was not reported.
- Quarterly capital expenditures were not reported.
- Quantitative GAAP EPS guidance was not provided because the company stated that it could not predict the relevant reconciling items with reasonable certainty.
- Prior-quarter comparisons for consolidated income-statement metrics were not reported.
- Third-quarter year-over-year percentage changes for gross profit, operating expenses, operating income, net income, EBITDA, and adjusted EBITDA were not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.