Wabtec raises 2026 profit outlook despite revenue miss

Adjusted earnings beat forecasts while sales fell short, and margin gains did the work

Wabtec reported third-quarter adjusted earnings per share of $2.83, topping the average analyst estimate of $2.72 compiled by Zacks Investment Research. Revenue came in at $3.12 billion, below the $3.23 billion Wall Street had expected, according to Zacks. On a GAAP basis, the company posted net income of $409 million, or $2.42 per diluted share, according to the Associated Press.

Sales rose 8.1% from a year earlier, when Wabtec reported adjusted earnings of $2.32 a share on revenue of $2.89 billion, according to a regulatory filing. The Associated Press reported the growth came from both the Freight and Transit segments. The gain in profitability was steeper than a year ago: adjusted operating margin rose 1.9 percentage points to 22.9%, compared with a 1.3-point increase to 21.0% in the same quarter last year, according to the company's filings.

Wabtec raised and narrowed its 2026 adjusted earnings guidance to a range of $10.85 to $11.05 a share, up 20 cents at the midpoint and about 22% above last year. It left its full-year revenue outlook unchanged at $12.30 billion to $12.60 billion, implying growth of 11.5% at the midpoint. The company has raised guidance in each of the previous two quarters this year, including a second-quarter lift tied to adjusted earnings of $2.76 a share, up 21.6% from a year earlier, on sales of $3.18 billion.

The pattern in this quarter's results, a revenue shortfall paired with an earnings beat, carries into the new guidance. Tightening the earnings range while holding the revenue outlook steady suggests management is leaning on cost control and product mix rather than faster sales growth to deliver the roughly 22% profit increase for next year. With revenue growth not keeping pace, the combination raises the question of how much further margins can expand if volume stays soft.