Westinghouse Air Brake Technologies Corporation (WAB) Earnings
Westinghouse Air Brake Technologies Corporation is expected to report next earnings on October 28, 2026 (in NaN days), with a consensus EPS estimate of $2.73. WAB has beaten EPS estimates in 8 of its last 12 reported quarters (average surprise +4.2% over the last four).
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Jul 22, 2026 | $2.59 | $2.76 | +6.4% | $3.2B | +3.6% |
| Apr 22, 2026 | $2.52 | $2.71 | +7.8% | $3.0B | -0.2% |
| Feb 11, 2026 | $2.08 | $2.10 | +1.0% | $3.0B | +3.5% |
| Oct 22, 2025 | $2.28 | $2.32 | +1.8% | $2.9B | +0.2% |
| Jul 24, 2025 | $2.17 | $1.96 | -9.7% | $2.7B | -2.3% |
| Apr 23, 2025 | $2.03 | $2.28 | +12.3% | $2.6B | +0.1% |
| Feb 12, 2025 | $1.74 | $1.68 | -3.4% | $2.6B | -1.5% |
| Oct 23, 2024 | $1.90 | $2.00 | +5.3% | $2.7B | -0.7% |
| Jul 24, 2024 | $1.88 | $1.96 | +4.3% | $2.6B | +0.2% |
| Feb 14, 2024 | $1.58 | $1.54 | -2.5% | $2.5B | +1.7% |
| Oct 25, 2023 | $1.46 | $1.70 | +16.4% | $2.5B | +6.1% |
| Jul 27, 2023 | $1.35 | $1.41 | +4.4% | $2.4B | +6.9% |
Source: company filings + earnings calendar. For informational purposes only — not investment advice.
Earnings call summary
Q2 FY2026 · July 22, 2026
AI summary of management’s prepared remarks and analyst Q&A. For informational purposes only — not investment advice.
Management highlights
- **Overall Quarterly Performance** • Delivered stronger-than-expected Q2 results, with revenue growth and margin expansion exceeding first quarter performance and management expectations. • Total Q2 sales were $3.18 billion (+17.5% YoY), adjusted EPS was $2.76 (+21.6% YoY), operating cash flow was $441 million, and total backlog grew substantially: 12-month backlog up 11% YoY, multi-year backlog exceeded $30 billion, up 42% YoY. • Disciplined capital allocation: net debt leverage ended at 2.2x, within the target 2-2.5x range after the $1 billion Dellner acquisition and $457 million in share repurchases in the first half of 2026. - **End Market Trends** • North American freight: Car load growth was mixed in Q2, but long-term trends are robust. The 2026 industry new railcar build forecast was slightly increased to 25,000 units, which remains 21% lower than 2025 levels. • International: Large infrastructure investment is driving a robust order pipeline, highlighted by a major $1 billion Australian win in Q2. • Transit: Positive underlying growth, with rising ridership in Europe and India, and strong backlogs supported by public investment in fleet expansion and renewal. - **Key Operational Updates** • Progress on Integration 3.0 productivity and efficiency initiatives, with stronger-than-expected cost savings delivered in Q2. • Recent acquisitions (Inspection Technologies, Frauscher, Dellner) are performing ahead of early expectations, expanding the company's product portfolio and total addressable market. • Secured several large notable orders in Q2: a $1 billion integrated order from an Australian customer covering locomotives, services, components and digital solutions; a $184 million positive train control order for Vale in Brazil; a $55 million platform door order for the Grand Paris Express project; and a $52 million mining drive systems order for APAC.
Guidance
- Management increased full-year 2026 guidance, with revenue now expected to be approximately $12.5 billion at the midpoint (up 11.5% YoY), a 1 percentage point upward revision from prior guidance. - Adjusted full-year EPS is now guided to a range of $10.60 to $10.90, with 20% growth at the midpoint, representing a 30 cent upward revision to the guidance midpoint. - Second half 2026 revenue growth is expected to temper versus the first half, as the company laps the addition of inspection technologies to the portfolio in the prior year. Revenue growth is expected to be slightly higher in Q3 2026 versus Q4 2026. - The majority of full-year 2026 margin expansion is expected to occur in the second half of the year, specifically Q4 2026, driven by lapping 2025 tariff increases, growing productivity from Integration 3.0 and portfolio optimization, and lapping weak 2025 Q4 margin comparables. Q3 2026 margin growth is expected to remain consistent with first half rates, while Q4 will see meaningful margin acceleration. - Full-year 2026 services revenue is expected to decline year-over-year due to lower first half modernization deliveries, even with growth returning in the second half.
Segment performance
Total Q2 2026 consolidated revenue was $3.18 billion, up 17.5% year-over-year. 1. **Freight Segment**: Revenue increased 16.9% year-over-year. GAAP operating income was $504 million, with an operating margin of 22.5% (up 0.9 percentage points YoY). Adjusted operating income was $579 million (up 20.6% YoY), with an adjusted operating margin of 25.8% (up 0.8 percentage points YoY). 12-month backlog was $6.64 billion (up 10.2% YoY), and multi-year backlog was $25.33 billion (up 47.8% YoY). This segment contributed ~70.6% of total consolidated revenue. 2. **Transit Segment**: Revenue was $936 million, up 18.9% year-over-year (17.7% adjusted for currency). GAAP operating income was $146 million. After adjusting for $20 million in purchase accounting/amortization charges from the Dellner acquisition, adjusted operating income was $166 million, with an adjusted operating margin of 17.7% (up 2.5 percentage points YoY). 12-month backlog was $2.5 billion (up 14.5% YoY), and multi-year backlog was up 19.4% YoY. This segment contributed ~29.4% of total consolidated revenue. Sub-segment performance: - Equipment: Up 35% YoY, driven by higher locomotive deliveries and increased mining sales. First half 2026 equipment growth was 43%; moderate positive growth is expected in the second half as modernization deliveries ramp. - Services: Core services grew, but this was offset by lower expected modernization deliveries in the first half. Full-year 2026 services revenue is expected to decline YoY, with growth returning in the second half as modernization deliveries increase. - Components: Down 0.7% YoY, due to the declining North American railcar build and portfolio optimization, partially offset by higher industrial product sales. - Digital Intelligence: Up 88.5% YoY, driven by contributions from the inspection technologies and Frauscher acquisitions.
Risks & headwinds
- Tariff-related headwinds continue to impact gross margins, with rising manufacturing costs and unfavorable product mix partially offsetting operating margin gains from productivity and cost recovery. - Inflationary pressures and component shortages (especially for electronics) remain ongoing headwinds. - North American railcar build demand remains depressed in 2026, with a 21% decline expected for the full year, pressuring component segment revenue. - Large international order negotiations can extend over multi-quarter timelines, creating uncertainty around the timing of win conversion to revenue. - Some supply chain shifts to mitigate tariffs require significant upfront investment, and full structural mitigation is pending greater stability in global tariff policy.
Analyst Q&A
Q: How is demand tracking to sustain current 12-month backlog growth, and what drove the better-than-expected Q2 results that allowed guidance to be raised? /
A: Management noted improved global demand, with a strong pipeline of large orders expected to close in the second half of 2026. Q2 revenue beat expectations driven by accelerating sustainable flow business growth (partially from higher car loads boosting locomotive operations and transit aftermarket strength) and timing of pulled-forward shipments from the second half. Higher-margin flow business and stronger Integration 3.0 productivity gains drove the earnings beat, leading management to extend this performance into the second half and raise full-year guidance.
Q: What drives the large gap between 12-month backlog growth (11% YoY) and multi-year backlog growth (42% YoY), and is Q2 8.5% organic growth sustainable? /
A: The multi-year backlog covers revenue over multiple years, and the current level represents the strongest backlog coverage Wabtec has ever had, supporting long-term growth. Half of 2026 H1 total growth comes from acquisitions, and half from organic growth, which reached 5.5% on a first-half basis (adjusting for Q1 timing impacts). After normalizing for acquisitions and currency, 12-month backlog supports continued mid-single-digit organic growth in the second half, consistent with prior long-term guidance.
Q: Why is most full-year margin expansion expected in Q4 2026, and does this indicate a higher 2027 exit rate for margins? /
A: The strong Q4 2026 margin growth expected primarily comes from lapping non-recurring items from Q4 2025: higher compensation expenses from strong 2025 cash flow performance, transit manufacturing inefficiencies from production rebalancing that created weak 2025 Q4 margins, and a large step-up in 2025 Q4 tariff costs that will not repeat. H1 2026 performance is the best indicator of the long-term margin trend, with the Q4 acceleration driven by easy comparables rather than a step-change in 2027 growth.
Q: What is the update on the EVO Advantage locomotive modification program for North American Class 1 railroads? /
A: Wabtec secured its first North American EVO Advantage order in Q2 2026, consistent with prior guidance. The program delivers an average 5+% fuel efficiency improvement for customers, widening Wabtec's competitive advantage. Older locomotive modification programs remain in demand alongside EVO Advantage, with demand also growing in international markets, and order conversion for the new product is mostly expected in upcoming quarters.