Train products manufacturer and supplier Wabtec (NYSE: WAB) lowered its sales guidance for 2019 but kept its projections for how much profit it expects to make from its operations.
Wabtec now anticipates adjusted sales of $8.3 billion for 2019, compared with guidance of $8.4 million made in the first quarter of 2019, the company said when reporting its second quarter earnings on July 30. The lowered projection comes amid lower rail volumes in the U.S. compared with last year.
But Wabtec maintained its guidance for adjusted income from operations of about $1.2 billion, and it renewed its guidance of earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.6 billion. Wabtec also updated its guidance for adjusted earnings per diluted share to $4.10-$4.20 from a previous guidance of $4.00-$4.20. All these figures compare the guidance that Wabtec offered when announcing first and second quarter results.
Wabtec reported earnings per diluted share of $0.54, with adjusted earnings per share of $1.06, in the second quarter of 2019. In contrast, Wabtec reported earnings per diluted share of $0.87 in the second quarter of 2018. The adjusted earnings per share figure for the second quarter of 2019 and any other adjusted earnings figures that Wabtec reported today take into account Wabtec’s merger with GE Transportation in late February.
Income from operations totaled $201 million in the second quarter, while adjusted income from operations was $320 million. Income from operations in the second quarter of 2018 totaled $124 million.
Net interest expense was $59 million and adjusted net interest expense was $55 million in the second quarter of 2019, compared with net interest expense of $32 million in the second quarter of 2018. Income tax expense was $21 million in the second quarter of 2019, compared with $11 million in the second quarter of 2018.
“In light of conditions in the North American freight market, we have accelerated our cost reductions and synergy initiatives. We are already beginning to reap strategic benefits from the merger of Wabtec and GE Transportation, completed just a few months ago,” said Wabtec chief executive officer Rafael Santana.
He continued, “We are confident the company’s diverse business model, focus on aftermarket and services, technology capabilities and global presence will generate long-term growth. We believe our efforts to improve costs, including a synergy target of $250 million by year four following the merger, will drive significant, long-term value for our customers and shareholders.”
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