How Much Will Coronavirus Hurt Wabtec's (WAB) Q2 Earnings?

Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation WAB, is scheduled to report second-quarter 2020 earnings numbers on Jul 28, before market open.

The Zacks Consensus Estimate for second-quarter earnings has been revised downward by 18.1% in the last 60 days. Let’s take a look at the factors that might influence the results this time around.

Supply chain disruptions and global economic slowdown amid coronavirus concerns are expected to have taken a significant toll on Wabtec’s second-quarter performance. The impact is likely to have been greater in the second quarter than the first.

Freight net sales are expected to reflect soft North American and intermodal carload volumes due to weak global macroeconomic conditions stemming from coronavirus-related woes.

Similar to the first quarter, net sales at the Transit segment might have been hurt by decline in organic sales and unfavorable currency translations.

Additionally, escalating operating expenses are expected to have dented the company’s bottom line in the second quarter.

The adversities are expected to have been partly offset by increased revenues from the GE Transportation merger and the RELCO Locomotives acquisition.

Westinghouse Air Brake Technologies Corporation Price and EPS Surprise


Westinghouse Air Brake Technologies Corporation Price and EPS Surprise

Westinghouse Air Brake Technologies Corporation price-eps-surprise | Westinghouse Air Brake Technologies Corporation Quote

What Does the Zacks Model Say?

Our proven model does not predict an earnings beat for Wabtec this time around. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Wabtec has an Earnings ESP of -0.22%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank:  Wabtec carries a Zacks Rank #2.

Highlights of Q1 Earnings

In the last-reported quarter, the company delivered a negative earnings surprise of 2%. Moreover, the bottom line declined 8.5% year over year due to higher operating expenses. Although total sales jumped 21.1% year over year, it missed the Zacks Consensus Estimate. Year-over-year increase in sales was owing to the inclusion of GE Transportation products.

Stocks to Consider

Investors interested in the broader Transportation sector may consider Air Lease Corporation AL, Canadian Pacific Railway Limited CP and Expeditors International of Washington, Inc. EXPD as these stocks possess the right combination of elements to beat on earnings this reporting cycle.

Air Lease has an Earnings ESP of +23.32% and a Zacks Rank of 3. The company will announce second-quarter earnings numbers on Aug 6.

Canadian Pacific has an Earnings ESP of +1.27% and a Zacks Rank #1. The company will release second-quarter results on Jul 22.

Expeditors has an Earnings ESP of +6.87% and a Zacks Rank #3. The company will disclose second-quarter financial numbers on Aug 4.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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