Post Earnings Coverage as WABCO’s Quarterly Sales Grew 8.5%; Adjusted EPS Jumped 7%

Upcoming AWS Coverage on Lear Post-Earnings Results

LONDON, UK / ACCESSWIRE / April 26, 2017 / Active Wall St. announces its post-earnings coverage on WABCO Holdings Inc. (NYSE: WBC). The Company posted its first quarter fiscal 2017 results on April 21, 2017. The maker of technology and control systems for commercial vehicles surpassed top- and bottom-line expectations. Register with us now for your free membership at:

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One of WABCO Holdings’ competitors within the Auto Parts space, Lear Corp. (NYSE: LEA), held a conference call to review its Q1 2017 financial results and related matters on April 26, 2017. AWS will be initiating a research report on Lear in the coming days.

Today, AWS is promoting its earnings coverage on WBC; touching on LEA. Get our free coverage by signing up to:

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Earnings Reviewed

For the quarter ended March 31, 2017, WABCO’s sales of $747.3 million, increased 8.5% from a year ago period and up 11.0% in local currencies. The Company’s sales numbers surpassed analysts’ consensus of $717 million.

For Q1 2017, WABCO’s gross profit margin of 31.7% was 17 bps higher on a y-o-y basis. The Company gained $22 million through additional volume and better absorption and an additional $21 million from material and conversion productivity. WABCO set a new record for conversion productivity at 8.1% for the reported quarter.

During Q1 2017, WABCO reported operating margin of 14.5%, up from revised 13.4 in Q1 2016. For the reported quarter, the Company’s performance operating margin was 14.9% for the reported quarter, up from revised 14.7% in the year ago quarter, in accordance with Accounting Standards Update 2017-07.

For Q1 2017, WABCO reported net income of $80.7 million compared to a loss of $13.4 million in Q1 2016. The Company reported diluted EPS of $1.48, up from negative $0.24 in the year ago same quarter. Earnings, adjusted for one-time gains and costs, came in at $1.47 per share, up from $1.37 in the prior year’s same period and ahead of Wall Street’s estimates of $1.44 per share.

Segment Results

In Q1 2017, WABCO’s Operating System, the Company’s globally standardized management environment, delivered $21.4 million of materials and conversion productivity. It generated gross materials productivity of 5.1%. WABCO, in the reported quarter, continued to strongly convert income into cash, resulting in net cash from operating activities of $54.3 million.

Recent WABCO Highlights

On April 19, 2017, WABCO and G7 announced an agreement to form a joint venture in China to develop and sell advanced fleet management systems for trucks and trailers. Privately-held G7 is an award-winning technology leader in China’s fleet logistic industry with a base of over 400,000 connected vehicles. Each Company will hold a 50% stake in the new joint venture. Through its extensive nationwide support and installation network, G7 provides 85% of China’s largest logistics companies with real-time solutions that connect trucks, drivers, shippers and fleet managers.

Recently, WABCO disclosed that – from Q2 2016 to Q1 2017 – it has entered into contracts in local currencies with customers worldwide that total $1.2 billion of expected cumulative incremental business. These awards include $746 million in new business earmarked from 2017 through 2021 inclusive.

In Q1 2017, Volvo Eicher (VE) Commercial Vehicles in India announced the launch of WABCO’s OptiDrive™ automated manual transmission (AMT) technology for their complete range of buses and medium-duty truck platform. A breakthrough in AMT technology, OptiDrive transforms a manual transmission into a highly efficient, integrated solution for commercial vehicles, which automatically shifts gears and operates clutch actuation at optimal speed. Industry award-winning OptiDrive increases fuel economy up to 5% while reducing emissions.

Full Year 2017 Guidance

Based on its estimate of future market conditions, WABCO maintains its previously disclosed guidance for full year 2017 regarding sales in the range of $2.85 billion to $2.99 billion. At the same time, WABCO revised its guidance for full year 2017 operating margin in accordance with newly adopted Accounting Standards Update 2017-07 to 14.7% to 15.1%. Due to a lower reported tax rate for 2017 than previously expected, WABCO updated its forecast for reported diluted EPS in the range of $5.44 to $5.94 from the earlier range of $5.23 to $5.73.

Share Buyback Program

Since June 2011, WABCO has repurchased 18,833,912 shares for $1,530.7 million in open market transactions as of March 31, 2017, including 538,000 shares bought back for $59.7 million during Q1 2017. WABCO is further authorized to repurchase up to $540.3 million of additional shares through December 31, 2018.

Stock Performance

At the close of trading session on Tuesday, April 25, 2017, WABCO Holdings’ share price finished the trading session at $118.70, rising slightly by 0.67%. A total volume of 509.24 thousand shares exchanged hands, which was higher than the 3 months average volume of 359.25 thousand shares. The stock has advanced 11.25% and 19.71% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the Company have gained 11.82%. The stock is trading at a PE ratio of 29.66. At Tuesday’s closing price, the stock’s net capitalization stands at $6.51 billion.

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