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WabtecWAB was the No. 2 S&P 500 stock on Wednesday after the supplier of locomotives and railcars for freight and passenger service topped Q2 earnings estimates and raised its full-year outlook. WAB stock zoomed past a buy point.
Strong international performance, backlog growth and a wider profit margin — despite tariffs — powered Wabtec shares toward the top of a buy zone.
After the close, East Coast rail network CSXCSX topped Q2 earnings and raced higher after a quiet regular session. CSX highlighted "tight truck supply," which is helping fuel intermodal shipment volume, a combination of rail and truck. Infrastructure and data center construction are supporting demand, as are growth in exports of coal amid some mine restarts.
Wabtec Earnings
Results: Wabtec posted adjusted earnings per share of $2.76, up 21.6% from a year ago and 16 cents ahead of estimates. Revenue of $3.179 billion showed an acceleration to 17.5% growth, topping estimates by just over $100 million.
Operating margin rose 0.8% from a year ago to 21.9%. The 12-month backlog grew 11% to $9.14 billion, while the multiyear backlog soared 42% to over $30 billion, CEO Rafael Santana said on the analyst call, according to a FactSet transcript.
Among the notable "wins" was a $1 billion order from an Australian customer for new locomotives, services, components and digital solutions. Wabtec also highlighted a $184 million order from mining giant ValeVALE.
Outlook: Wabtec raised its full-year sales outlook by $110 million to a range of $12.3 billion to $12.6 billion. Adjusted EPS is now seen growing 18.2% to 21.5% to a range of $10.60 to $10.90, up from the prior outlook of $10.25 to $10.65.
CSX Earnings
Results: CSX posted a Q2 profit of 54 cents per share, up 23% and two cents above estimates. Revenue rose 10% to $3.94 billion, topping the $3.894 billion consensus.
Outlook: For the full year, CSX said it expects mid- to high-single digit (implying 5% to 9%) revenue growth. Operating margins should rise more than 350 basis points from 2025. Total capital expenditures will undershoot $2.4 billion. Free cash flow will grow more than 80%. Ahead of the Q2 report, analysts projected EPS growth of 21.5% to $1.96 on revenue growth of 6.6% to $15.026 billion.
S&P 500, WAB, CSX
Wabtec surged 10% to 290, reclaiming a 275.84 buy point. The buy zone runs through 289.63. WAB powered as high as 295.41, before easing off its highs.
Prior to Wednesday, WAB had chugged ahead 35.5% so far this year, putting it No. 75 among the S&P 500. The benchmark index had climbed 9.7% so far this year, finishing 1.3% off its record June 2 closing high on Tuesday. The S&P 500 closed off 0.1% on Wednesday.
CSX inched ahead 0.1% before earnings but rose 37.5% year to date through Tuesday. In after-hours trade, shares breezed ahead 4.2% into record high territory.
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