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Wabtec Corporation (WAB) manufactures products for locomotives, freight cars and passenger transit vehicles.
Wabtec's stock has not escaped the market turmoil despite its solid fundamentals. But the company continues to expand in the middle of the crisis, a testimony to its financial strength.
Wabtec to Acquire Standard Car Truck
On Sep 15, WAB announced it was acquiring Standard Car Truck, a rail equipment supplier, for $300 million in cash.
Standard Car Truck, which manufactures components for locomotives and freight cars, has annual sales of $225 million. It has 550 employees and operates 9 manufacturing plants in Illinois, Ohio and Pennsylvania.
Wabtec will finance the transaction through its $500 million credit facility and has already obtained a commitment from a group of banks including JP Morgan Securities Inc. and PNC Capital Markets LLC.
"The company will enable us to provide freight car customers with a broader, value-added package of truck components and assemblies," said Albert J. Neupaver, president and chief executive officer.
"With our combined knowledge of in-train braking forces and design capabilities, we will be uniquely qualified to advance stabilization technology for the industry. In addition, we see opportunities to build on Standard Car Truck's existing aftermarket and international presence," he said.
Consensus Estimates Are Holding
For now, consensus estimates are holding. Third-quarter estimates are unchanged over the last 90 days at 65 cents per share. Full year estimates are up 6 cents to $2.67 in the last 90 days.
Wabtec is a Zacks #2 Rank (Buy) stock. It has surprised on estimates 4 consecutive quarters by an average of 5.41%. WAB reports third-quarter earnings on Oct 22. |
